Progress Energy Resources Corp PRQ.TO said Malaysia's state oil company Petronas PETR.UL has agreed to raise its offer to buy the Canadian natural gas producer by 8 percent after Progress received an unsolicited proposal from a third party.
Petronas, which in June launched a C$20.45 per share offer for Progress, will now pay C$22.00 for each share, or C$5.17 billion ($5.12 billion) in total.
Progress did not name the third party that made the unsolicited offer, but said its board has approved Petronas's latest offer.
The Canadian company, known for its reserves in British Columbia's Montney tight gas region as well as Alberta's Deep Basin, already has a joint venture with Petronas.
Last year, Petronas paid C$1.07 billion for a half interest in shale gas fields owned by Progress and the two pledged to study the feasibility of exporting liquefied natural gas to Asian markets.
Petronas is being advised by Bank of America Merrill Lynch on the deal, while BMO Capital Markets is advising Progress.
Progress shares rose 12 percent to C$22.45 in early trade on the Toronto Stock Exchange on Friday.
($1 = 1.0098 Canadian dollars)
(Reporting by Krishna N. Das in Bangalore)