The emergence of a new E.12.8bn ($17.3bn) offer for Spanish/Franco Altadis tobacco firm from private equity groups CVC Capital and PAI Partners has eclipsed the earlier E.12bn ($16.2bn) offer from Imperial Tobacco.

Analysts are now speculating on whether this will effectively signal a 'highest bidder wins' auction in the battle to control Altadis – which also owns 50% of Spanish duty free operator Aldeasa.

Altadis, which owns Gauloise cigarettes and Cohiba cigars (amongst many other brands) has responded to the new bid by saying that its board will now meet to discuss the latest offer.

The bid from UK-based CVC and France's PAI is 'friendly' in the sense that it is conditional on the support of the Altadis board and acceptance from shareholders representing 75% of the firm's holdings.

Whether Imperial Tobacco will now decide to refresh its offer remains to be seen and this latest bid comes on the back of major consolidation in the international tobacco market in the last few years.

Only last December Japan Tobacco agreed to buy Silk Cut brand owner Gallaher for $19bn and in February of this year Imperial struck a ?974m ($1.9bn) deal to acquire the US cigarette maker Commonwealth Brands.