UPDATE 1-TPC Group gets higher buyout offer from Innospec

* Potential offer at $44 to $46 per share in cash

* TPC says will consider the non-binding proposal

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Oct 8 (Reuters) - Chemicals maker TPC Group Inc said it received a buyout proposal from Innospec Inc , valuing the company at up to $721 million, topping an offer made by private equity firms First Reserve Corp and SK Capital Partners.

Specialty chemicals company Innospec could offer $44 to $46 per share in cash, TPC said in a statement on Monday. First Reserve and SK Capital offered $40 in late August.

The stock, which closed at $40.67 on the Nasdaq on Friday, has consistently traded above the price offered by the private equity firms, and at least two top-10 shareholders have said they will vote against the deal.

TPC said it will consider the non-binding proposal from Innospec. It had said a transaction with First Reserve and SK Capital Partners would be in the best interest of shareholders.

TPC's main product is butadiene, used in making synthetic rubber for tires and other automotive products, but its business has come under pressure this year as prices for butadiene have fallen sharply because of weak demand.

Perella Weinberg Partners LP is advising TPC.

(Reporting by Krishna N. Das in Bangalore; Editing by Don Sebastian)

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