The Alternative Hotel Group (AHG) has submitted an increased offer for hotel and leisure group De Vere.
Its new bid is pitched at 850p per share, up from the 825p it tabled on Sunday 24 June. This new offer values De Vere at £745.4m, compared with £723.5m from its first bid.
It also trumps the informal offer which private equity group Permira made on Monday 26 June. Permira's offer, of 840p per share or £705m, was rejected by the De Vere board.
The De Vere directors regard the AGH offer as "fair and reasonable" and intend to unanimously recommend it to shareholders.
De Vere has also agreed to pay AHG an inducement fee of £7.45m if the AHG bid is withdrawn or lapses after a third party makes an equivalent or higher offer or if the De Vere directors change or modify their recommendation.
Permira, which has just acquired the six-strong Principal Hotels chain for £300m and is pondering the future of its Travelodge budget hotel business, said it was still considering whether to make a formal offer for De Vere.
AHG was set up by the directors of Marylebone Warwick Balfour (which owns the Malmaison and Hotel du Vin boutique hotel chains) to buy Initial Conference Centres (now Verve Venues) last year for £325m.
It has secured financial backing from the Bank of Scotland for its proposed takeover of De Vere, which operates 19 De Vere hotels, 155 timeshare lodges, and 16 Village hotels and leisure clubs.
By Angela Frewin