Gas and chemicals company Air Products and Chemicals raised on Thursday its hostile bid for rival Airgas by 5.8% to $5.3 billion, but the offer remained slightly below the company's current market value.

Air Products said it is now offering to pay $63.50 in cash for each Airgas share, up from its previous all-cash bid of $60 a share, which was rejected by the company.

Airgas shares closed at $63.87 on the New York Stock Exchange on Thursday. The shares rose 48 cents to $64.35 in extended trading, signaling that investors may still expect a higher bid from Air Products or another competitor.

Airgas said its board will review the bid and advised shareholders not to take any action pending that review.

Air Products has nominated a slate of directors to Airgas' board that shareholders will vote on at the company's annual meeting, which is expected to be held on or before September 17. Shareholders who buy shares before July 14 should be eligible to vote at the meeting, Air Products said.

According to a source familiar with the matter, Air Products wanted to boost its bid before that date to attract investors with the higher price. Still, Morningstar analyst Basili Alukos questioned whether the $3.50 a share increase would be enough for Airgas shareholders.

"At the end of the day, if an investor wanted to do the deal, they could just sell their shares on the open market," Alukos said. Air Products launched its unsolicited bid for the Radnor, Pa.-based Airgas in February. At stake is the top position in the North American industrial gas market, which many believe is poised for a rebound.