Verigy received a sweetened buyout offer of $907.5 million in cash from Tokyo-based Advantest, but the semiconductor testing firm said its board is not making any recommendation on the proposal as yet.

Advantest's offer of $15 a share, up from its prior bid of $12.15 a share, represents a premium of about 19 percent to Verigy's Wednesday's close on Nasdaq.

Cupertino, California-based Verigy had received a $728.8 million buyout offer from Advantest earlier, but had said at that time that the offer was not superior to its pending transaction with LTX-Credence Corp.

Verigy, which had about 60.5 million shares outstanding as of December 8, said its board continues to recommend the LTX Credence-merger deal to its shareholders.

In November, Verigy said it agreed to buy smaller rival LTX-Credence in a deal valued at about $424.4 million, in a move seen as creating a more formidable competitor in the system-on-chip (SoC) test space and provide stiff competition to rival Teradyne.

Verigy, with Morgan Stanley as its financial adviser, expects to continue talks with Advantest regarding the revised proposal.

Semiconductor makers rely on companies such as Verigy, Advantest and Teradyne to test the efficiency and quality of their chips and the acquisition of Verigy could help Advantest achieve higher scale for its SoC product.

Verigy shares, which have gained about 60 percent in value over the last one month, were up $1.83 or 14 percent at $14.46 in before-the-bell trade. They closed at $12.63 on Wednesday on Nasdaq.

(Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Jarshad Kakkrakandy)