A group of US investors led by Carl Icahn and Warren Lichtenstein said on Thursday it may raise the bid price for KT&G, boosting shares in South Korea's top tobacco firm.

Icahn and Steel Partners II L.P., headed by financier Lichtenstein, have offered to buy KT&G at 60,000 won, valuing the firm at US$ 10 billion, in the first hostile takeover bid for a major South Korean firm.
Referring to comments by KT&G chief executive Kwak Young-kyoon that its shares are worth 70,000 won, the investor group said it was prepared to allow KT&G to prove this.
"We are prepared to allow you to demonstrate this or a greater value to us and would consider increasing our acquisition price if you are able to do so," Lichtenstein, who heads the committee representing the investors, said in a letter to Kwak.
Shares in KT&G rose as high as 3.2 per cent after the remark, extending mild early gains. The stock ended up 1.78 per cent at 57,200 won.
Lichtenstein also urged KT&G's management to reconsider its bid offer and asked for a response by 10 March.
"We are prepared to commit a minimum of approximately 2 trillion won (US$ 2 billion) and up to 50 per cent of the total purchase price of our own equity capital towards the consummation of a transaction," he said. "In particular, we would consider commencing a cash tender offer."
But a KT&G official, who asked not to be named, said: "We may not have time to consider Icahn's proposal as the annual shareholder meeting is approaching,"
The Icahn group is the second-largest shareholder in KT&G with a combined 6.72 per cent stake. (pi)