AIRLINES : Aeromexico Joins Hurwitz in Bidding for Continental : Competition: In all, five groups bids have submitted offers for the Houston carrier.

The bidding for Continental Airlines heated up Tuesday, with Aeromexico announcing that it has agreed to join a group led by corporate raider Charles Hurwitz in an improved $400-million offer for the carrier.

Continental later announced that a bid submitted by Air Canada and a group led by a pair of Ft. Worth investors had been increased by $25 million Monday to $425 million. It also said Lufthansa German Airlines and Los Angeles investor Marvin Davis have asked for more time to revise their $400-million bid.

The news came on the heels of an announcement Monday that Scandinavian Air Systems had joined Houston Air Inc. in its effort to buy Continental, which is in the midst of bankruptcy reorganization. In all, five bids have been submitted for the carrier.

Continental also said the federal bankruptcy court had granted it yet another extension in filing a reorganization plan, which had been due Tuesday. The court set a Nov. 16 deadline.

Aeromexico and an investor group made up of some shareholders and other Mexican investors have “agreed in principle” to join the group led by Hurwitz, chairman of Houston-based Maxxam Inc., according to a statement.

Aeromexico and its investor group would provide $100 million in cash in exchange for a 20% equity stake that would be in convertible preferred stock, Maxxam spokesman Robert Irelan said.

Hurwitz’s group had opened the bidding for the Houston carrier in July with a $350-million offer.

The original bid had required any other competing proposals to top the offer by $35 million.

Continental filed for protection from its creditors under Chapter 11 of the federal bankruptcy laws in December, 1990.

Houston Air is owned by Alfredo Brener, a Mexican national living in Houston. SAS already owns about 18% of Continental’s stock.

In addition to SAS joining the bid, Houston Air said Northwest Airlines and Mexicana Airlines have agreed to participate in “an advisory capacity.”

“Both have agreed to work with Houston Air and SAS to develop areas of synergy and possible areas of cooperation with Continental,” a Houston Air statement said. “Neither is putting up any capital into the offer.”

“What Continental lacks is the financial wherewithal to expand and prosper, and that’s what Houston Air, SAS and the cost-savings from the advisory partners will provide,” Brener said.