Chemical maker TPC Group said private equity firms First Reserve and SK Capital Partners raised their offer price for the company by 12.5%, days after it got a rival proposal from Innospec.

The offer has been raised by $5 to $45 per share, valuing TPC at $705.5 million.

The company said it had ended negotiations with Innospec, which last month offered $44 to $46 per share in cash.

The TPC board recommended that shareholders vote in favor of the latest offer from the two private equity firms.

The company, which produces butadiene used in making synthetic rubber for tires and other automotive products, has seen a sharp fall in prices in recent months due to weak demand.

The bidders, however, are betting on a long-term shortage in butadiene.

Butadiene is a byproduct of the process of making ethylene and its supply is likely to dip as companies shift to cheaper natural gas liquids such as ethane to produce ethylene.

TPC stock has risen nearly 12% since Aug. 27, when First Reserve and SK Capital made their first bid.