March 10 (Bloomberg) -- Texas Pacific Group, a U.S. buyout firm with more than $15 billion in assets, boosted its unsolicited bid for U.K. chemical maker British Vita Plc to about 667 million pounds ($1.29 billion).

Texas Pacific offered 353 pence a share for the Manchester, England-based British Vita, the San Francisco-based buyout firm said today in a Regulatory News Service statement. That's 5.4 percent higher than a 335-pence-a-share bid that British Vita, the U.K.'s largest maker of foam rubber, rejected last month.

Texas Pacific, which attorney David Bonderman helped found in 1993 after working with Texas billionaire Robert Bass, owns stakes in Burger King Corp., Oxford Health Plans Inc. and several technology and health-care companies. The new offer for British Vita is 27 percent higher than its closing price of Feb. 1, the day before the company said had been approached.

Shares of British Vita rose 5 pence, or 1.5 percent, to 348 pence at 8:05 a.m. in London.

British Vita said Texas Pacific's initial bid ``substantially'' undervalued the company. British Vita, whose shares have risen 29 percent this year, will shut plants to cut costs and will sell units. It's also trying to boost prices to keep up with increased raw material costs.

On March 7, British Vita said it would pay a special dividend of 100 pence a share as part of its defense against the bid by Texas Pacific. The company will ask shareholders to approve the one-time payment, which will cost about 185 million pounds. British Vita spent 108 million pounds on share buybacks between 2001 and 2004.

The U.K. chemical maker's second-half net income declined 14 percent to 12 million pounds, or 6.6 pence a share, from 14 million pounds, or 6.9 pence, as it had costs from a reorganization plan and demand for its products fell. British Vita didn't release second-half results, which were calculated by Bloomberg News.

Buyout firms use a combination of their own funds and debt to pay for takeovers. They then typically seek to expand those companies or improve performance before selling them within five years. Such firms cater to pension funds, other institutional investors and wealthy individuals and promise higher returns than other investment opportunities.

To contact the reporter on this story: Christopher Elser in London at celser@bloomberg.net.

Last Updated: March 10, 2005 03:21 EST