Melrose said on Thursday that it had upped the value of its approach by two per cent, offering 850 pence a share versus 840 pence previously and proposing that shareholders be allowed to retain an interim dividend of 8 pence per share declared in July and payable on 2 September.
The proposed offer values Charter at £1.433bn against £1.403bn previously.
Melrose, which since June has had two approaches rejected by Charter and was facing a 6 September deadline from regulators to make a formal bid, said in August that it had asked Melrose for more time to table a firm offer.
"In light of the heightened recent economic uncertainty and market volatility, the company has commenced discussions with Melrose about its proposal and, in the meantime, has agreed to grant Melrose access to company information," Charter said in a statement.
Charter said its board would consider whether to recommend shareholders accept the approach should Melrose indicate its intention to make a firm offer.