THE billionaire owner of BHS today increased his provisional takeover bid for Top Shop owner Arcadia to nearly £775m.

Philip Green said the possible 408p-a-share offer was a ''final proposal'' to Arcadia's board.

Arcadia, which also owns Miss Selfridge and Wallis, rejected a 365p-a-share, or £690m, takeover approach by the entrepreneur earlier this month as being too cheap.

Including options which have been promised to senior management, today's deal would be worth £850m.

The offer is dependent on Arcadia recommending the deal.

It is also dependent on certain agreements being entered into with Icelandic company Baugur, which owns 20 per cent of Arcadia.

This will include Mr Green buying Baugur's holding and then selling certain of the Arcadia assets to the Icelandic firm.

Under a deal Arcadia is expected to be broken up, with Baugur taking the trendy Top Shop, Top Man and Miss Selfridge brands and Mr Green holding the more mature Wallis, Dorothy Perkins and Burton chains.

The deal is also subject to finalising financing arrangements.

Arcadia said in a statement it was ''currently considering its response to this proposal''.

It said a further announcement would be made ''in due course''.