UPDATE 1-UK's Micro Focus faces battle for Borland

* Borland receives rival cash offer of $1.25/share

* Micro Focus says its offer in "best interests"

(Adds Borland statement, background)

LONDON, June 26 (Reuters) - A takeover battle for Micro Focus (MCRO.L) bid target Borland Software BORL.O has restarted after the U.S. firm said it has received a proposal that it feels would be superior to one made by Micro Focus.

British software firm Micro Focus, which last week increased its offer to $1.15 per share following a rival bid of $1.20 in cash, said in a statement on Friday it believes its offer is in the best interests of both companies.

It did not say whether it would be increasing its offer again, commenting only: "The board of Micro Focus will maintain its strict financial acquisition criteria."

Shares in Micro Focus, whose customers include Tesco and Boeing, gained last week on relief that a rival bidder had pulled out of the process. [ID:nLI439420] Texas-based Borland said in a filing on Thursday evening that the strategic buyer had increased its offer proposal to $1.25 in cash, adding it had opened its books to the unnamed party for due diligence.

Micro Focus' recommended offer values Borland at $88 million and would take the British company's share of the global software testing market to 15 percent.

Shares in Micro Focus, which have gained 50 percent over the last year, closed on Thursday at 377 pence, valuing the FTSE 250 company at 762 million pounds ($1.2 billion). ($1=.6153 Pound) (Reporting by Victoria Bryan; editing by Mike Nesbit)