Gas giant BG Group has sweetened its offer for Pure Energy Resources as it wages a proxy bidding war for the Australian company with Royal Dutch Shell.

Shell is bidding for Pure through its Australian partner Arrow Energy. BG put its offer up to A$1.03 billion (£465 million) and made the bid conditional on getting 90% of the stock to shut out Arrow. The company says its offer of A$8.25 a share, a 3.1% increase on its last bid, is final in the absence of a higher bid.

Brisbane-based Pure's independent directors and two key shareholders this week accepted BG's offer, taking its interest in the target to 29%, while Arrow has 20.2% and Shell 11.2%.

BG's latest offer "requires everyone to come across the board" to succeed, said Andrew Williams, an oil and gas analyst at Credit Suisse Group in Melbourne. "It's a 'put up or shut up'.You would only do it if you thought you had options" for other investments."

The latest BG offer is 10 cents higher than Pure's closing price yesterday of A$8.15. Brisbane-based Arrow says it was still considering "all options" on the takeover.

"At some point, there is a crossover point for us between value we would get from accepting the bid versus value that we'd get from acquiring the company," Arrow chief executive Nick Davies has said.

Shell yesterday reiterated that it was continuing to evaluate all offers for Pure.