APN Outdoor has increased its bid for rival Here, There & Everywhere's Adshel advertising unit to $540 million.
French advertising giant JCDecaux has made a $1.1 billion bid for APN Outdoor on condition that the ASX-listed firm abandons its attempt to buy Adshel, but APN has instead modified its offer from an initial $500 million to a $540 million cash-and-scrip deal.
The bid comprises $230 million in cash and 54.1 million APN Outdoor shares.
APN Outdoor said the acquisition of Adshel, which was the subject of a failed approach by oOh!Media in April, would give it increased reach and diversity by combining its billboard and transport platforms with Adshel's street furniture assets in Australia and New Zealand.
APN Outdoor chief executive and managing director James Warburton, said it would help support long-term, sustainable growth.
"There is an opportunity for us to use our expertise in large-scale digital developments to support the roll-out of digital across Adshel's street furniture format, particularly in Australia," Mr Warburton said on Friday.
"We expect this would enable us to bring digital to a broader range of advertisers and complement our existing product offering to those advertisers."
Shares in the Australian billboards and outdoor advertising group had gained 12.1 per cent to $6.56 on Thursday following the announcement of JCDecaux's bid, their highest level in almost two years.
Here, There and Everywhere noted that APN Outdoor's soaring share price raised Adshel's valuation to about $585 million according to the structure of the deal.
Nonetheless, it said it was not ready to recommend any offer to its shareholders.
"HT&E is continuing to engage with other parties in relation to its Adshel business and expects to receive offers for Adshel from other interested parties," it said in a statement.
:HT&E anticipates that any other offers received will be subject to terms that will need to be considered by HT&E."
APN Outdoor shares had dipped 11.5 cents, or 1.8 per cent, to $6.445 by 1442 AEST on Friday while HT&E shares were six cents, or 2.5 per cent, higher at $2.42.
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