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(Adds share movement, TVH response)
Dec 28 (Reuters) - European industrial equipment supplier Loxam SAS raised its offer for UK's Lavendon Group Plc on Wednesday to 442 million pounds ($542.86 million), in response to an increased bid by Belgian industrial equipment supplier TVH Group NV.
* Loxam offered 260 pence per Lavendon share, after TVH Group increased its offer to 251 pence and brought the offer value to 427 million pounds.
* Lavendon shares rose 2 percent to 262 pence at 0903 GMT on the London Stock Exchange, just above Loxam's offer, implying that shareholders were not expecting a higher bid from TVH Group.
* TVH Group and Loxam have been locked in a bidding war for Lavendon, which has seen offers increasing from 205 pence per share, boosting its stock by about 85 percent since Nov. 22, when TVH first made public its interest in the British firm.
* Both companies are eyeing the British firm's market share in equipment rental business in the UK and the Middle East.
* Lavendon rebuffed TVH's first offer, citing concerns over execution risk and potential disruption to its business.
* TVH Group said on Wednesday that it was considering its options after Loxam's new offer.
$1 = 0.8142 pounds Reporting by Vidya L Nathan in Bengaluru; Editing by Vyas Mohan