effectively raised its offer for ICB Shipping AB of Sweden by making an all-cash bid in place of a previous stock-and-cash bid.

ICB, though, said it still believes the offer undervalues the company and recommended shareholders not to sell their shares until the board has evaluated Bermuda-registered Frontline's offer document.

Frontline is now offering 115 Swedish kronor per ICB share, valuing ICB at 3.237 billion kronor ($426 million). On September 1, Frontline offered three Frontline shares or 115 kronor in cash for each ICB share, with the cash part limited to a maximum 25 percent of ICB's shares.

Based on Frontline's closing price on Thursday of 35.4 Norwegian kroner, the stock part of the first offer was worth 111.5 Swedish kronor per share, Frontline said.

"The public criticism of the offer has to a great extent focused on the value of the Frontline share and the limitation of the cash offer,'' Frontline said on Friday. "In order to ensure successful completion of the offer, Frontline's board has decided to adjust and improve the conditions of the offer.'' In addition, Frontline said it has dropped plans for a secondary listing in Stockholm because of the low interest for the stock-swap offer in the Swedish market.

The 115 kronor per share bid represents a 21 percent premium to ICB's market price before the offer was made, Frontline said.

ICB rose 1 krona to 115 kronor in Stockholm on Friday, while Frontline rose 0.8 kroner to 36.2 in Oslo.

Since the first offer was made, Frontline has raised its stake in ICB to 23.1 percent of the capital and 15.5 percent of the votes in the Swedish shipping company.

The subscription period for the offer will run from September 25 to October 16, with a prospectus due by September 24.

While the offer is based on an acceptance rate over 90 percent, Frontline said it will retain the right to complete the offer at a lower acceptance "if the circumstances are deemed to such that a long-term combination of Frontline and ICB is feasible.'' If the offer is completed, Frontline will become one of the world's largest tanker shipping companies with a fleet of 44 ships, including so-called Very Large Crude Carriers, or VLCCs, as well as Suezmax tankers.

In addition, Frontline is close to buying Bermuda-based London & Overseas Freighters Plc for between $100 million and $125 million, according to recent media reports.