The source said talks were quite advanced but declined to give further details.
LONDON (Reuters) - Buyout firm Terra Firma and French utility Suez <LYOE.PA> are in talks to trump an agreed 1.2 billion pound ($2.4 billion) bid for British waste firm Biffa <BIFF.L>, a person close to the matter said on Friday.
The source said talks were quite advanced but declined to give further details.
The Daily Telegraph, without naming its sources, said a joint bid from Terra Firma and Suez could be pitched as high as 380-390 pence a share.
Only two weeks ago, Biffa agreed a 350-pence-a-share bid from private equity groups Montagu Funds, General Electric's <GE.N> Global Infrastructure Partners and UCIL.
!ADVERTISEMENT!By 5:23 a.m. EST, Biffa shares were up 1.3 percent at 369-1/2 pence, after hitting a new high of 374-1/2 pence. Suez shares were down 2.8 percent at 40.40 euros.
Biffa, which demerged from British water firm Severn Trent Plc <SVT.L> in October 2006, had no comment. A Paris-based spokeswoman and a London-based spokesman for Suez both declined to comment. Suez is in the midst of merging with Gaz de France <GAZ.PA>.
Terra Firma, which recently bought British music group EMI, also declined to comment.
Sources close to the matter told Reuters earlier this month that Terra Firma and Suez were among suitors still interested in Biffa. The sources also said UK-based buyout firm CVC was in the fray, though its interest was less advanced.
Some analysts have said Biffa, which collects, treats and recycles waste and provides disposal services throughout Britain, could attract a bid as high as 400 pence a share.
The Financial Times said Goldman Sachs <GS.N> and Morgan Stanley <MS.N> were advising Suez and Terra Firma respectively and had agreed to fund a bid above 350 pence a share.
(Reporting by Mark Potter and Eleanor Wason; Additional reporting by Miyoung Kim and Sudip Kar-Gupta; Editing by Louise Ireland and Erica Billingham)
