OM Gruppen, the operator of Sweden's stock exchange, has raised the stakes in its battle to take over the London Stock Exchange.

OM said it would offer LSE shareholders £35.83 in cash and OM shares for each share, in a bid valuing it at £1.06 billion.

The Swedish group's original cash and shares bid back in August valued each LSE share at £27.19, giving the LSE a value of £808 million.

Since then, OM's share price in Sweden has slipped back, reducing the value of the original bid.

OM said it would also allow LSE shareholders to own up to 33 per cent of the enlarged OM group, should the bid be successful. It would appoint new directors to OM's board to represent the former LSE shareholders, it added.

The move comes ahead of an extraordinary general meeting by the LSE on Thursday at which shareholders will discuss getting rid of a 4.9 per cent shareholding limit.

For the OM bid to be successful, this limit needs to be waived and OM has asked shareholders to scrap it.

OM president and chief executive officer Per Larsson said: "On any rational measure we have made the case for ownership of the LSE.

"LSE has failed its shareholders with its inability to deliver a strategy to face up to the commercially-competitive world it inhabits.

"LSE lacks the culture, the commercial management and internal technology resources to make necessary fundamental changes.

"It is now up to shareholders to decide to equip LSE with the means to compete. A commercial ownership and management is required."

Only one per cent of LSE shareholders have so far backed the original OM bid. The bid led to the LSE pulling out of merger talks with Germany's Deutsche Borse to create a joint exchange called iX.