SBB's new approach values Entra's shares at 190 Norwegian crowns each, an increase of 15.2% from its original offer made in November and topping last week's bid from Castellum of 185 crowns.

Entra's shares jumped 3.5% on the news to trade at 195.5 crowns at 1248 GMT, indicating investors see potential for a higher bid.

Entra has said it is prepared to engage with potential buyers and to discuss alternatives to the company's independence strategy.

"The board appreciates the continued interest in Entra shown by SBB, and notes the improvement in the financial terms proposed relative to SBB's earlier proposal," Entra Chairwoman Siri Hatlen said in a statement on Wednesday.

She added that Entra's owners should keep their options open for the time being.

Nordic brokers Carnegie have said bids for Entra could reach 200 crowns per share.

SBB said 65% of its offer would be paid in cash, corresponding to 123.5 Norwegian crowns, while the remaining 66.5 crowns would be in shares.

"To facilitate Norwegian investors becoming shareholders in SBB and to further underpin Norway being a core market for SBB, we intend to pursue a dual listing of SBB Class B shares on the Oslo Stock Exchange in 2021," CEO Ilija Batljan said.

Castellum's bid of 185 crowns has a smaller cash component of 54.39 crowns, while the rest would be paid in shares.

Complicating the bidding for Entra is Swedish real estate firm Balder, which on Dec. 17 raised its stake in the Norwegian firm to 15% from 10%.

Balder, which made its first investment in Entra on Dec. 7, has said it does not plan a full takeover.

($1 = 8.7041 Norwegian crowns)

(Editing by Jason Neely and Chizu Nomiyama)

By Terje Solsvik