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(Reuters) - Chemical maker Innospec Inc (IOSP.O) raised its bid for peer TPC Group Inc TPCG.O to about $745 million, aiming to thwart a rival offer from private equity firms First Reserve Corp and SK Capital Partners.
Innospec raised its bid to $47.50 per share in cash, from its earlier proposal of $44.00 to $46.00 per share. The offer is being supported by Blackstone Group LP (BX.N), which would provide equity financing.
TPC Group shares were trading at $47.75 before markets opened on Thursday.
The company suspended negotiations with Innospec last week, when First Reserve Corp and SK Capital Partners raised their offer by $5 to $45, valuing the company at $705 million.
TPC Group said on Thursday that it has renewed discussions and negotiations with Innospec and has authorized Innospec to resume its due diligence review.
"We were disappointed to have been denied sufficient access to complete our due diligence," said Innospec Chief Executive Officer Patrick Williams.
"Our diligence so far has confirmed our initial findings that TPC is a good strategic fit with Innospec."
Innospec said it expects to be able to submit a definitive proposal by December 5, when TPC shareholders are is due to meet.
TPC said it continues to recommend that its shareholders vote in favor of the deal with First Reserve Corp and SK Capital Partners.
At the heart of the bidding war for TPC is butadiene, which is used to make synthetic rubber for tires and other automotive products. Though prices for butadiene, TPC's main product, have fallen sharply this year, the bidding companies are betting on long-term demand. (Reporting by Swetha Gopinath in Bangalore; Editing by Ted Kerr)