Entrepreneur Mr Philip Green raised his bid for British clothes retailer Arcadia today, and investors said it would be hard to resist the £770 million sterling cash offer.
The 408 pence per share bid comes after the owner of Topshop and Burton rejected Mr Green's 365 pence offer made earlier in the month after saying it was too low.
Arcadia shares surged as much as 14 per cent in early trading and stood 12 per cent higher at 385.5 pence at 10.40 a.m.
The company said it was considering the latest approach from the owner of rival retail chain BHS.
The cash offer is subject to Arcadia's recommendation and a deal with main shareholder Baugur, involving the purchase of Baugur's 20 per cent stake and the sale of some Arcadia assets to the Icelandic retailer.
The leading Arcadia shareholder said the company's directors faced a difficult decision. "It's a tough call for them because at the end of the day, in a market that is going down, cash is attractive," he said.
Mr Green said Baugur, which aborted a bid for Arcadia earlier this year when it failed to raise the cash, had agreed to support the proposal if the bid conditions were met.