By Toni Clarke

The offer values ImClone at $6.1 billion, based on the number of shares outstanding at the time of the company's latest quarterly report.

Carl Icahn, the billionaire investor and chairman of ImClone's board, said in a statement he has had several conversations with the chief executive officer of a large pharmaceutical company, culminating in the latest proposal.

Bristol-Myers declined to comment.

A $70 a share offer would represent a premium of 51 percent over ImClone's closing price of $46.44 on July 30, the day before Bristol-Myers announced its $60 a share offer.

The premium is more in line with such recent deals in the sector as Takeda Pharmaceutical Co Ltd's <4502.T> offer for Millennium Pharmaceuticals at a premium of 53 percent.

But any pharmaceutical company seeking to acquire ImClone, which makes the cancer drug Erbitux, faces unique challenges. For one thing, Bristol-Myers markets Erbitux in the United States and receives roughly 61 percent of the drug's revenue.

Erbitux is ImClone's key product and is approved to treat colon cancer and head and neck cancer.

Any second bidder would have to deal closely with Bristol, which holds a 20 percent stake in ImClone. Ironically, Bristol paid $70 a share for its stake seven years ago. It has threatened to sell the stake if ImClone doesn't accept its offer.

It is also unclear who owns the rights to ImClone's drug IMC-11F8, a closely-watched successor to Erbitux. Bristol-Myers claims it has the rights. ImClone claims the same for itself. If the matter goes to arbitration, it could take months or years to resolve.

"In order for a company to offer a premium like this you can't have the rights to a major pipeline product up in the air," said Karen Andersen, an analyst at Morningstar. "I wouldn't be surprised if the due diligence part of this doesn't trip up this deal."

Icahn said no determination has been made whether $70 a share would be adequate. The company's European partner is Merck KGaA . Merck declined to comment.

"It's good to get some more competition into the bidding process," said Eric Schmidt, an analyst at Cowen & Co. "In the end it probably goes to Bristol as they have the most incentive and are the most needy. This may force their hand."

ImClone's shares rose 7 percent to $68.10 by midday on Nasdaq. Earlier in the day they hit a 52-week high of $68.89.

(Additional reporting by Debra Sherman in Chicago and Patricia Gugau in Frankfurt; Editing by Brian Moss and Dave Zimmerman)