The independent directors of Hellaby Holdings said they won't support Bapcor's sweetened takeover unless it also includes a dividend payment that would use up imputation credits.

Bapcor on Monday raised its takeover offer for Hellaby Holdings to $3.60 a share from $3.30, bringing it into the independent valuation range and winning increased acceptances from the Accident Compensation Corp and drawing in other institutional investors to lift total support for its proposal to 40 per cent.

Bapcor chief executive Darryl Abotomey said his company won't increase the cash offer again.

Hellaby shares jumped 7.8 per cent to $3.45, the highest level since March 2015.

The independent directors "believe that the revised terms of the offer should also allow for the payment of a dividend, in addition to the cash offer price, to allow shareholders to benefit from both the earnings generated in the half year which has now almost completed and the large capital gain on the sale of the Equipment Group," chairman Steve Smith said in a statement.

"The board has determined a dividend of 18 cents per share would allow maximum use of imputation credits which would otherwise be lost."

Hellaby's independent valuation from Grant Samuel was $3.60-to-$4.12 a share, published on Nov. 1, and Hellaby had said the original offer from Bapcor under- valued the business, especially the automotive unit that Bapcor is interested in.

Bapcor countered that the valuation didn't include Hellaby's corporate head office costs but it failed in a request to the Takeovers Panel to look into alleged breaches of the Takeovers Code by Hellaby.

Bapcor extended the closing date for the offer to Jan. 18 from Dec. 20, while the last date that Bapcor could declare the offer unconditional was pushed out to Feb. 1 from Jan. 3.

Last week Hellaby's largest shareholder, Castle Investments, said Bapcor's offer was "compelling" and in trying to fend off the approach, the diversified investor has overstated its prospects and its independent valuation has omitted some costs.

The takeover is a play for Hellaby's auto parts business and Bapcor has said it will sell the target company's equipment, resources and footwear businesses if successful.