Silver Lake Management said it had boosted its offer for Software AG to €32 (approximately $35.25) per share after Bain Capital submitted a takeover proposal.

Silver Lake and Software AG disclosed in a statement that they’d agreed to the higher offer price, which improves on the earlier bid of €30 (about $33.05) apiece.

Earlier, Bloomberg News reported that Bain Capital recently submitted a roughly €2.5 billion (approximately $2.8 billion) takeover proposal to Software AG, which topped Silver Lake’s initial bid and ramped up a takeover battle for the German firm, people familiar with the matter said. 

The Boston-based buyout firm is proposing an offer of about €34 (about $37.45) per share, the people said. Bain has already lined up financing for the potential bid, which envisions combining its portfolio company Rocket Software Inc. with the German firm, according to the people.  

Software AG said in a statement that the company had “reviewed a preliminary, non-binding offer from a U.S. Software competitor, subject to a number of conditions precedent,” that led to a renegotiation with Silver Lake. The company didn’t disclose the name of the bidder.

Bain first signaled interest in Software AG earlier this year before Silver Lake’s offer became public, the people said. Its Rocket Software arm has built up a 10 percent position in Software AG, it disclosed in a filing.

Silver Lake last week moved to solidify its head start in the nascent takeover battle, saying it’s now locked in 30 percent of the company after buying more shares. That includes a 25 percent stake it already agreed to buy from the Software AG Foundation

Any move to combine Rocket Software with Software AG may be difficult without winning control of the German company through a domination agreement, which would be complicated by Silver Lake’s stake. Bain’s proposal of €34 (about $37.45) per share is contingent on it gaining control of Software AG, and the price may be slightly lower if it ends up securing a smaller stake, the people said. 

Software AG chief executive officer Sanjay Brahmawar last week said Silver Lake is “aligned” with the company’s strategic direction and it isn’t planning to run a broader sale process. The tech-focused private equity firm agreed in late 2021 to invest €344 million (approximately $379 million) in Software AG. Silver Lake managing director Christian Lucas was later made the company’s supervisory board chairman.

Bain could eventually try to team up with Silver Lake or seek to convince the firm to sell its holding. Deliberations are ongoing, and there’s no certainty they will lead to a transaction, the people said, asking not to be identified because the information is private. 

A representative for Bain declined to comment.