MEXICO CITY (Reuters) -Grupo Mexico will not enter a bidding war for Citi's retail unit in the country, known as Banamex, as its offer already places the lender at a higher value than a previously accepted competing bid, the miner and transport conglomerate said on Tuesday.

The firm seemed to be looking to calm market jitters after shares plunged on Monday on the bid, wiping off around $10.7 billion in market value - more than its $9.3 billion offer for Banamex.

Shares ticked back up around 1.5% in mid-day trading Tuesday.

Analysts had speculated that Grupo Mexico - controlled by German Larrea, one of the nation's wealthiest men - could engage in a back-and-forth for Banamex, more than two years after scrapping a previous offer.

The miner's fresh bid launched last week comes after Citi announced a deal to sell a 25% stake in Banamex to Mexican billionaire Fernando Chico Pardo, chairman of airport operator ASUR, for around $2.3 billion.

BACK IN ACTION

Grupo Mexico bowed out of the race for Banamex in 2023 after tensions with the government of then-President Andres Manuel Lopez Obrador tangled up talks, leading Citi to opt to list the unit.

After Chico Pardo's tie-up, Citi aimed to move ahead with an IPO and gauge interest from other Mexican magnates. It still backs that plan despite Grupo Mexico's offer, though investors may favor the upfront cash.

Still, Citi is hoping Chico Pardo's pricetag sets a floor for a potential share price in an IPO, a source told Reuters.

DIGGING FOR A DEAL

Grupo Mexico said on Tuesday that its bid would involve selling off 40% of Banamex to Mexican private investors and pension funds, and that it already had commitments lined up to carry out the sale.

It could also launch a public offer at a later date to include smaller investors, it said.

On Friday, the miner said it would also consider allowing Chico Pardo to move forward with his stake purchase, if Grupo Mexico were to purchase the rest at the same valuation.

Grupo Mexico said on Tuesday that its existing investment plans were still on track, with or without the Banamex purchase. And to fund the deal, it would not need to significantly raise its debt load, the miner said.

The most needed would be under $2 billion, already covered through agreed-upon credit lines, it added.