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UPDATE 1-Brazil's Centauro boosts offer for Netshoes to outbid Magazine Luiza

(Adds loan details, share performance)

SAO PAULO, June 12 (Reuters) - Apparel retailer Grupo SBF SA , operator of Brazil's Centauro stores, has boosted its offer for online sports retailer Netshoes Cayman Ltd to $3.70 per share, as it tries to outbid rival contender Magazine Luiza SA.

Netshoes shares surged 12.5% on the news to $3.42 in New York trading.

According to a securities filing late on Tuesday, the new offer raises the total value of Grupo SBF's bid to about $114.9 million, a 5.7% increase over the previous $3.50 per share bid by Centauro, which did not get a counter offer by Magazine Luiza.

Common shares in Magazine Luiza fell around 1% in early trading in São Paulo while Grupo SBF shares rose more than 1%.

The bidding war underpins the importance of internet merchants to attract shoppers who are increasingly inclined to buy products online on their smartphones and tablets.

Grupo SBF said shareholders of Netshoes are scheduled to deliberate on the transaction on Friday, and added it had sweetened the offer because of Netshoes' weak financial condition and short-term liquidity concerns.

Netshoes board had said it needed guarantees of long-term financial support after receiving the last SBF bid.

SBF said the proposal included a 120 million real ($31 million) loan to boost Netshoes' immediate working capital needs, with a commitment to release 70 million reais two days after the signature of a merger agreement.

At the end of May, Magazine Luiza had raised its own offer to $3 per share of Netshoes from $2 per share, valuing the company at around $93 million.

According to a Magazine Luiza securities filing on June 3, the board of Netshoes recommended that the target's shareholders vote in favor of that latest offer.

($1 = 3.8441 reais) (Reporting by Ana Mano; Editing by Bernadette Baum)