Lucky Stores Inc. said Monday it has provided confidential information to rival American Stores Inc. in exchange for an agreement that it will sweeten or end its hostile takeover bid by May 17.

Lucky said it continues to recommend that its shareholders accept the leveraged buyout offer of $61 a share, or $2.35 billion, made on April 28 by the New York investment firm Gibbons, Green, van Amerongen Ltd.But analysts said Salt Lake City-based American Stores remains a strong contender under the new agreement, which Lucky said also provides a number of protections to its stockholders.

"My continuing belief is that American Stores will acquire Lucky," said Edward Comeau of Wood Gundy Corp. in New York. "From the beginning, it was apparent that American badly wanted Lucky, needed Lucky and can afford to pay more for it than anyone else."

Lucky closed down 37.5 cents a share at $61.371/2 on the New York Stock Exchange. American Stores stock fell 50 cents a share to $59.75.

American Stores, which initiated the bidding with a $45-a-share offer that Lucky rejected in March, is the owner of the Alpha Beta grocery chain. With an acquisition of Lucky, the nation's sixth-largest supermarket chain, American Stores would surpass No. 1 Kroger Co. of Cincinnati to become the industry leader.