US wholesale drugs group McKesson Corporation on Thursday reportedly lifted its offer for German counterpart Celesio AG to €23.50 per share from €23 per share. McKesson increased its offer in a bid to win over hedge fund Elliott Management Corporation.  

According to a report by Reuters, McKesson in October offered €23 per Celesio share in a bid backed by Celesio's majority investor Franz Haniel & Cie. GmbH. Ltd. McKesson was seeking to forge a global leader in drugs distribution to boost its bargaining power with pharmaceutical majors.

But US hedge fund Elliott said that McKesson's $8.3 billion bid substantially undervalues Celesio. Elliott has spent about €800 million ($1.09 billion) building a stake of more than 20% in Celesio, which is enough to block the deal, the report said.

Elliott last month dashed hopes it would accept McKesson's bid for Celesio and said it had irrevocably bound itself not to accept the bid in its form at the time. Elliott is run by American investor Paul Singer and has 25.16%  of the voting rights in the German drug trading company, Reuters said in a previous report.