P&O shares surged on the London market after the UK ports and ferries group backed a fresh £3.9bn ($7bn) takeover bid from a Dubai-based operator.
The offer from Dubai Ports World - made after the close of trade in London on Thursday - topped a rival £3.5bn bid from Singapore's PSA International.
Both suitors are keen to take control of P&O's container ports businesses in Asia, Europe and the Americas.
P&O's management had previously backed PSA's 470 pence per share offer.
Shares in the group surged as much as 6% during the session before closing 25 pence, or 4.79%, higher at 547p on the London Stock Exchange.
A victory for state-backed Dubai Ports would create the world's third-biggest ports operator.
The company's revised 520p per share offer on Thursday was the latest twist in the saga for control of Peninsular & Oriental Steam Navigation since Dubai Ports first tabled an £3.3bn offer in November.
P&O said the improved bid from Dubai Ports represented a 71.3% premium on its closing price on 27 October 2005, when the company first received a takeover approach.
A successful bid by PSA, which is owned by the Singapore government's Temasek investment agency, would create the world's largest ports and containers group.
The agency already owns 4.1% of P&O.
Founded in 1837, P&O has three divisions - ferries, ports and logistics. In its heyday in the mid-1920s, it owned a fleet of almost 500 ships.