The Elf bid, known as a Pacman defence after the computer game in which a player turns and gobbles up its pursuer, would see the combined group split into two, a pure oil company and a chemicals business.
Elf estimated this would result in savings of 2.5bn euros - twice the level promised by TotalFina when it launched its offer for Elf. But initial market reaction was that TotalFina might see off its French rival.
Elf is offering three of its shares plus 190 euros for every five TotalFina shares while TotalFina is offering four of its shares for every three Elf shares. At last night's close, the Elf offer represented an 8 per cent premium to the TotalFina share price, while TotalFina's offer represented a 1.3 per cent premium to the Elf share price.
TotalFina said the bid from the Elf chairman Phillippe Jaffre showed he recognised the merits of a merger, having initially rejected one.
But Mr Jaffre said that by creating the world's fourth biggest pure oil group and fifth biggest chemical company, Elf would increase value for both sets of shareholders.Reuse content