The European consortium Finalrealm, which is affiliated with the French food group Danone, says that UB has accepted its offer of 265p a share, valuing United Biscuits at �1.2bn.

"The board of Finalrealm and the independent directors of United Biscuits announce that they have reached agreement on the terms of a recommended cash offer," the two sides said in a statement.

United Biscuits Chairman Gordon Hourston said the offer provided excellent value for shareholders and would be recommended.

The bidding battle started when a US consortium led by snacks giant Nabisco increased its offer for UB to 254p a share, valuing United at �1.2bn.

United Biscuits shareholders would receive an interim dividend of 3.6p a share.

The new offer trumped the bid on the table by the US consortium, which formed the Burlington Biscuits company specifically to make an offer for UB.

It is also 35% higher than the 188p closing price of UB shares on 1 October, the day before United said it was in talks which could lead to an offer being made.

Finalrealm is made up of venture capital group Cinven, French private equity firm PIA, an affiliate of BNP-Paribas, and DB Capital Partners, an affiliate of Deutsche Bank.

If successful in its bid, it is understood Finalrealm would sell some of UB's assets to Groupe Danone, France's largest food group.

Burlington bid

Burlington urged shareholders to take no action as it was still reviewing its options.

When Burlington made its original offer, it said that after the takeover, Nabisco would merge its own European and Middle Eastern operations with UB, creating a new firm called Burlington Biscuits Holdings, in exchange for a 23% stake in the new company.

Nabisco also planned to buy from Burlington UB's interests in China, Hong Kong and Taiwan.

Underperforming

The battle to win control of UB, which makes the well-known Penguin and McVitie's brands as well as KP snacks, began in October when the company let it be known it was struggling and was open to offers.

UB's woes have largely been the result of supermarket price wars, which have put pressure on its margins. It concluded that it needed to be part of a larger concern to be able to compete.

United Biscuits describes itself as an international food group with operations in 22 countries, employing 22,500 people around the world - about 19,000 of those in the UK.

It says international biscuit sales are approaching �1bn and that its UK snacks business boasts sales worth more than �300m. It also says it is the fourth-largest biscuit company in the world and number two in Europe.