Arco has until Tuesday to raise its 61p per share offer or declare the bid final, but its calculations were thrown into doubt on Friday when Aran announced it had received an approach from a third party "which may lead to an alternative offer being made". Shareholders were urged to take no action.
Analysts regard Aran's move as an eleventh hour effort to smoke out a higher bid from Arco. Speculation about the identity of a possible white knight at first centred on Enterprise Oil, although sources say the company believes the asking price for Aran is already too high.
Two other oil companies - Chevron and Monument Oil & Gas - have also been mention-ed, but the City's favourite is Statoil, the Norwegian state oil company that teamed up recently with Aran in a joint venture to develop the Connemara oil field off the west coast of Ireland.
Sources say Arco may offer more than 70p per share, based on new information that Aran's chairman, Michael Whelan, plans to release. The Irish company was asked for additional details by the mystery suitor and under takeover rules must share them with all bidders.
Bruce Evers, oil analyst at Henderson Crosthwaite, says the ball is now firmly in Arco's court.
"If Arco has any sense they will come straight back with a knockout bid agreed with Aran. I'd say 80p a share would clinch it," he said.
Either way, it appears one plank of Aran's defence strategy has been removed as its days of independence look increasingly numbered.
Aran's shares rose by 5.75p on Friday to close at 72.75p, as investors anticipated an improved offer.