Finalrealm, the team of BNP-Paribas, Deutsche Bank and Cinven, which proposes to sell a portion of UB's assets to Danone, the French food giant if its bid is successful, said it had delivered a a 265p-a-share cash offer to UB'S board.
The proposal, following an offer from Burlington Biscuits of 254p a share, values the UK company at pounds 1.26bn. The offer also entitles UB shareholders to a dividend of 3.6p.
Peter Kirtley, an analyst at Investec Henderson Crosthwaite, said: "The UB management must be ecstatic. This is exactly what they wanted." Finalrealm's move, which came after the markets closed, shocked observers who had believed the US consortium of Hicks, Muse, Tate & Furst, the Texan buy-out team, and Nabisco, the US's biggest biscuit maker, was close to clinching the deal.
Burlington had raised its offer to 254p a share from its initial agreed bid of 245p after gaining control of 35 per cent of UB's equity. On Wednesday the group acquired 29.9 per cent of UB's shares and yesterday received irrevocable undertakings representing 4.5 per cent from Philips and Drew, the fund manager.
A spokesman for Burlington said: "We would remind people of our 35 per cent holdings and say we are reviewing the situation." Adrian Fisk, one of Burlington's advisers at Lehman Brothers, said he was awaiting Finalrealm's offer document. "It will be interesting to see what sort of crazy scheme they have come up with," he said.
UB shares yesterday closed down 4p at 256p.