Japanese drug maker Takeda has upped its offer to buy Irish rival Shire for a fourth time, pushing its bid to £42.8bn.
The latest cash-and-shares offer is valued at £47 per share in Shire - just 50p above the level rejected by Shire on a tumultuous day for the FTSE 100 firm yesterday.
It is unclear whether the small rise in the offer price will persuade Shire after it told investors yesterday the previous £46.50 per share bid "significantly undervalued the company".
But Takeda has sweetened its deal by upping the cash component. The latest offer comprises £21 in cash and £26 of Takeda shares, compared to a previous £17.75 to £28.75 split.
Takeda and Shire were unavailable for comment.
Shire has become the subject of fevered City speculation about a potential bidding war, after fellow Dublin-based pharmaceutical company Allergan emerged as another potential bidder before quickly backing off within hours yesterday.
Despite Allergan's swift U-turn, analysts believe further bids are likely as they say Shire's stock is undervalued relative to its earnings. Shire's lucrative portfolio of highly profitable medicines for rare diseases could also prove tempting to another bidder.
However Takeda may struggle to significantly raise its offer if it is rebuffed again, as analysts have pointed out it would need to take on a large amount of debt.
Any tie-up could create a global pharmaceutical powerhouse with close to £22bn of annual sales, roughly equivalent in size to Britain’s AstraZeneca.