Telco MNF Group has upped a takeover offer for Inabox by $1 million in order to beat a rival bid lobbed last week.

MNF Group (ASX:MNF) first launched an offer between $30.5 million and $33.5m to acquire Inabox’s wholesale and enablement businesses back in early October. After various conditions were met, the offer worked out at about 80c a share for investors.

But last week fellow telco SB&G Group launched a rival all-cash $21.4 million bid for the company, or 90c a share.

SB&G immediately bought up 19.9 per cent of Inabox and said its offer was more attractive thanks to its simplicity: it is an all-cash offer to directly acquire all shares from existing Inabox shareholders, rather than MNF’s conditional offer.

But this morning MNF increased its offer to $34.5m in cash for Inabox’s subsidiaries.

The new offer works out at 90c a share, and with franking credits $1 a share.

Inabox shares rose nine per cent to 97c, the highest point since June last year, while MNF shares, which have taken a beating since it first jumped in, fell 4 per cent to $3.86.

Inabox Group (ASX:IAB) shares are at their highest point since June last year.

MNF reckons its offer is better value for shareholders, but: “as a result of the simplicity offered by SB&G’s proposal, and to put matters beyond doubt for IAB shareholders, MNF has agreed to revise the terms of acquisition.”

Inabox unanimously recommended the new MNF offer.

Inboax says if shareholders do not approve this deal, they’ll need to raise at least $3m before the end of the calendar year to fund itself.

“The Inabox board believes the improved MNF transaction provides shareholders with greater certainty and a higher return than the SB&G Offer,” it said.

A meeting to vote on the original proposal was postponed on Friday, and has been rescheduled for December 7.