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Centerpulse, a Swiss company formerly known as Sulzer Medica, is trying to re-make its image after a highly publicized and expensive lawsuit over faulty artificial hips and knees. The company had about $950 million in sales last year.

``The board will meet quickly and review the offer, taking into consideration the interests of all concerned, and then issue a statement,'' said a Centerpulse spokesman.

In extending the offer, Zimmer aims to out-maneuver rivals Biomet Inc. (BMET.O) and Stryker Corp. (SYK.N) in the growing market for reconstructive medical implants.

Zimmer Chief Executive Ray Elliott said in a letter sent to Centerpulse that the offer represented an increase to a proposal it made in October, the terms of which were not disclosed.

``We provided you with a preliminary written offer in October that indicated we were prepared to increase our offer based upon new information,'' Elliott wrote, according to the Zimmer statement. ``We are increasing the offer now.''

Zimmer is a spin-off of drug maker Bristol-Myers Squibb Co.(BMY.N), one of the world's largest pharmaceuticals companies. Some investors in Bristol-Myers, which is struggling from patent expirations on important medicines and a dearth of new drugs, have said Bristol-Myers should have retained the dependable orthopedics business.

Zimmer also said it has made an offer for InCentive Capital AG, which holds 18.9 percent of the outstanding shares of Centerpulse.

InCentive said it had no immediate comment on the proposal.

A spokesman for Smith & Nephew was not immediately available to comment.

Shares of Smith & Nephew were down about 7.5 percent in London Stock Exchange trading.

``This is definitely not good news for Smith & Nephew. It either walks away from the deal and faces much stronger competition from Zimmer and Centerpulse combined, or it has to up its price,'' said Sebastien Jantet, an analyst with Investec Securities in London.

Zimmer, which also backed its second-quarter earnings per share target of 39 cents to 40 cents, said it expects the deal, if accepted, would add to its earnings per share in the first year, before charges and ``synergies.''

The Smith & Nephew offer, for 25.15 shares and 73.42 Swiss francs for every Centerpulse share, aims to create the world's third-biggest orthopedics group with global sales of around $2.5 billion. Smith & Nephew would also assume Centerpulse's debt, which stood at 165 million pounds at Dec. 31, 2002.