UPDATE 1-Softbank-backed Fortress Investment raises offer for Japan's Unizo

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TOKYO, Jan 29 (Reuters) - Softbank-backed Fortress Investment Group has raised its offer for Unizo Holdings Co by 27% to 5,200 yen per share after Blackstone Group sweetened its offer as the bidding war for the Japanese hotel operator heats up.

U.S. private equity firm Blackstone Group on Tuesday raised its proposed offer by 12% to 5,600 yen, topping a rival bid of 5,100 yen from U.S. buyout fund Lone Star that is backed by the Japanese hotelier.

Unizo in July was the target of a hostile bid by Japanese travel agent H.I.S. Co. Unizo at one stage turned to Fortress Investment to fend off that bid. But later it withdrew its support for Fortress’ offer.

Fortress was running its bid at 4,100 yen per share without Unizo’s support. Its renewed bid will continue till Feb. 13, according to the filing.

Blackstone has said it would launch its bid only if Unizo supports it.

Reporting by Junko Fujita; Editing by Clarence Fernandez and Louise Heavens