Milestone Apartments Real Estate Investment Trust (MST_u.TO), which last month agreed to be acquired by Starwood Capital Group for about C$1.7 billion ($1.3 billion), has started talks with the U.S. private investment firm about raising the initial bid, people familiar with the situation told Reuters.

The move comes days after proxy advisory firm Institutional Shareholder Services (ISS) issued a report recommending Milestone unitholders vote against the transaction.

Milestone’s units, which were unchanged before the Reuters report, rose 2 percent to C$21.48 as volume jumped, crossing the current offer of C$21.18.

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