Gannett, the publisher of USA Today, raised its unsolicited offer for Tribune Publishing to $15 per share from $12.25, valuing the publisher of the Chicago Tribune and the Los Angeles Times at about $475 million.
Including debt, the offer is worth about $864 million. Tribune's shares were up 22.1 percent at $14 in early trading on Monday, but far below the latest offer, which was set at a premium of 31 percent to Tribune's Friday close.
Tribune's board adopted a shareholder rights plan — popularly known as a "poison pill" — earlier this month in an attempt to thwart Gannett.
Gannett said the latest bid followed an analysis of Tribune's debt and pension liabilities.
"In addition, after further review, Gannett has greater confidence in its ability to yield additional operational improvements in this transaction," the company said.
Tribune said it would thoroughly review the revised offer.
Oaktree Capital Group, the third largest shareholder in Tribune, urged the company to negotiate a deal with Gannett earlier this month. Oaktree holds a 14.8 percent stake in Tribune.
The offer comes as newspapers struggle with declining circulation, rising costs and falling advertising sales, pushing publishers to consolidate and find new areas of growth.
Gannett shares were marginally lower at $15.63 in early trading.