San Miguel has offered to pay National Foods' shareholders AUS$6.40 in cash per share, lifting its previous bid of AUS$5.90 and seeing off Fonterra's latest offering of AUS$6.20 (although this figure would only be paid out if Fonterra acquires more than 90 per cent of the company).
National Foods' board has backed the new offer - which would value the company at around AUS$1.9 billion - in the absence of a higher bid.
"San Miguel's revised offer is towards the top end of the board's valuation range and better reflects the value of National Foods' leading brands, market position and superior management," said David Crawford, National Foods' chairman.
Fonterra said in a brief statement earlier today that it was aware of the revised offer and was "contemplating its next move".
Meanwhile, San Miguel's chairman and chief executive Eduardo Cojuangco said: "The acquisition of National Foods is an important step towards the realisation of our ambition to expand our presence in beverages and food in selected countries in the Asia Pacific region."
"We believe that the addition of San Miguel's Asian marketing strengths of National Foods will bring benefits to the Australian food and dairy industry," he added.
Analysts have suggested that it will be difficult for Fonterra to top San Miguel's self-styled "knock-out bid", although Fonterra's latest offer includes intangible tax-rollover benefits - said to be attractive to some of National Foods' retail shareholders.
An independent valuation of National Foods, which is Australia's market leader in dairy-based desserts, said the company was worth between AUS$6.01 and AUS$6.55 per share.
Following the revised San Miguel offer announcement, National Foods' shares soared to around AUS$6.40.
Since the bidding war for National Foods began in October last year, the value of its stock has risen by over a third.
San Miguel's latest share offer has waived all of its previous conditions - except a 50 per cent minimum acceptance condition - and is scheduled to close on 29 April.