CARLILLION last night (TUESDAY) raised its offer for Balfour Beatty for the third time, offering new terms that value its rival at more than £2bn.

Carillion said that it continues to believe in the powerful strategic logic of a merger with Balfour Beatty.

Balfour Beatty said it would consider the revised proposal and "make a further announcement in due course".

The improved offer comes ahead of a "put up or shut up" deadline of 5pm on Thursday.

Balfour shareholders have now been offered 58.268 per cent of the combined company, up from the previous 56.5 per cent share.

The revised offer represents a 36 per cent premium to the average price of Balfour shares in the month before news of the merger deal leaked.

Philip Green, chairman of Carillion, said: "Given the scale of the prize for shareholders of both Balfour Beatty and Carillion from a merger of the two companies, the board of Carillion remains committed to moving forward in a constructive and collaborative way with the board and management of Balfour Beatty to create a world-class business and very significant value for the shareholders of both companies."

If the merger does go ahead, Carillion has said it would not proceed with the sale of Parsons Brinckerhoff, the US engineering and design company owned by Balfour.