(Bloomberg) -- Volkswagen AG’s Audi brand raised its offer to gain a foothold in sports car brand McLaren to 650 million euros ($718 million) from 450 million euros, according to a report by the Germany’s Automobilwoche.

The idea is to take a stake in McLaren’s Formula 1 unit, while an investment in the sports car maker itself could happen in a second step, Automobilwoche reported, without saying how it obtained the information. The two parties plan to sign a letter of intent on Monday and Volkswagen’s supervisory board will discuss the matter later this month, according to the publication.

The German car manufacturer’s interest in McLaren first emerged late last year. Volkswagen AG’s premium brand had previously floated the idea of acquiring McLaren as a way to gain access to the Formula 1 business, but McLaren deemed the offer as too low, Bloomberg reported at the time. 

McLaren is also continuing discussions with BMW AG and signed a memorandum of understanding with the Munich-based carmaker on March 24 about the joint development of an architecture for electric sports cars, according to Automobilwoche. The agreement isn’t binding and could be voided by a deal with Audi, the report said.

Volkswagen, too, is pursuing a dual track strategy and plans a cooperation of its Porsche brand with Formula 1 team Red Bull, according to the report. 

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