Abu Dhabi National Oil Co. has increased its takeover offer for Covestro AG to about €11 billion ($12.4 billion) as it seeks to convince the German chemical producer to enter talks, people familiar with the matter said.

Adnoc’s latest proposal values Covestro at about €57 per share, up from its first informal bid of around €55, the people said, asking not to be identified because the information is private. The state-backed firm voiced confidence in Covestro’s strategy and management, according to the people.

Shares of Covestro were up 3.4% to €49.24 at 5:28 p.m. Tuesday in Frankfurt. Last month, Leverkusen-based Covestro rejected Adnoc’s earlier proposal as too low, people familiar with the matter said at the time. Covestro also raised questions around Adnoc’s plans for its specialties operations.

Adnoc has tried to address Covestro’s concerns about its offer, including over how it would help the German company’s management develop the specialty chemical operations, according the people. If negotiations are entered, there could be scope for further increases in Adnoc’s bid.

Deliberations are ongoing, and it’s unclear how Covestro will respond to the latest proposal. Representatives for Adnoc and Covestro declined to comment.

Adnoc, which produces almost all the oil in the United Arab Emirates, plans to invest $150 billion to expand production capacity for crude, natural gas and chemicals.

It’s also in separate talks with Austria’s OMV AG about a potential merger of two petrochemical firms they back, Borouge Plc and Borealis AG.

Author: Eyk Henning, Aaron Kirchfeld and Dinesh Nair