Diversified manufacturer Manitowoc has increased its bid for British kitchen equipment maker Enodis to 1.08 billion pounds ($2.1 billion) to trump a rival offer, according to a Reuters report.

Manitowoc, which makes cranes and restaurant equipment, offered 294 pence a share for Enodis, topping an agreed bid of 282 pence a share from U.S. rival Illinois Tool Works Inc (ITW). The offer from ITW beat an earlier bid of 260 pence a share from Manitowoc.

Enodis, which makes fryers for fast food groups such as McDonald's and Burger King, will also pay an interim dividend of 2 pence a share. According to the Reuters report, Enodis' shares rose 2.3 percent to 305 pence, above the offer price, by 1000 GMT, suggesting investors believe ITW may come back with another offer.

"I certainly wouldn't discount it. I don't think it's necessarily finished," said Arbuthnot Securities analyst Michael Blogg. "Because ITW has fewer antitrust issues than Manitowoc, at least in theory it should be able to afford to pay more," he added.

Analysts say ITW would be less likely to be required to sell businesses in order to obtain regulatory approval as it has less direct overlap with Enodis. With a market capitalization of $5.3 billion, Manitowoc is less than a fifth of the size of ITW, which has a market value of $28.6 billion.

Enodis, whose market capitalization stands at 1.12 billion pounds, is seen as an attractive takeover target because of the fast growth being experienced by the catering equipment industry, particularly in the United States, and especially in the fast food category.

A spokesman for Enodis declined to comment on Monday's developments. ITW said it is "considering its position with respect to Enodis and will make a further announcement in due course."

Manitowoc said that, assuming the deal is completed in the second half of 2008, it is expected to be earnings enhancing in two years.

The increased offer represents a premium of 108 percent to Enodis' closing price on April 8, the day before it entered into an offer period.  Manitowoc called on Enodis' directors to recommend unanimously that shareholders vote in favor of the improved offer, which is conditional on approval by U.S. and European antitrust authorities.

Manitowoc said it has committed funds to finance the increased offer from its backers JP Morgan, Deutsche Bank, Morgan Stanley, and BNP Paribas.

Manitowoc currently trades off a price/2008 earnings ratio of 14.2, compared with ITW on 17.2, and Enodis on 33.9.