TORONTO, FEB. 25 -- Canadian financier Robert Campeau increased his hostile bid for Federated Department Stores Inc. to $5.9 billion today and arranged to sell his Brooks Brothers clothing store chain for $770 million to help finance the deal.

The struggle for America's fifth-largest retailer escalated as the Campeau Corp. chairman sweetened his bid to stockholders to $66 a share and offered to increase the offer even more.

Federated stock rose $1.125 a share to $63.125 in heavy trading on the New York Stock Exchange, where it was the third most active issue. Campeau common stock rose about 20 cents a share to close at $16.58 on the Toronto Stock Exchange.

Campeau dropped his conditions for a friendly takeover and tried to outmaneuver Federated management by pressuring its outside directors, who have an 11 to 6 majority on the 17-member board.

Campeau, a Toronto-based developer and retailer, outlined financing commitments and offered to match terms of other bidders for the parent of upscale chains such as Bloomingdale's and I. Magnin.

Campeau's surprise announcement came as the board of Cincinnati-based Federated met in New York to consider options. A Federated spokesman would not comment on Campeau's moves, described by analysts as a major development in a battle that has raged since the Canadian first offered $47 a share, or $4.2 billion, on Jan. 25.

Federated was likely to continue to resist Campeau if it could, but the retailer would be faced with angry stockholders unless it can come up with a comparable deal, one analyst said.

Campeau raised his tender offer last week to $61 a share, or $5.5 billion, but said he would pay $66 a share, or $5.9 billion, if Federated agreed to a friendly deal before Friday. His offer was contingent on obtaining control and financing and on the invalidation of Federated's antitakeover defense. Also set as a condition was that antitakeover legislation in Delaware, where Federated is incorporated, be struck down or found inapplicable.

Campeau said he agreed in principle to sell Brooks Brothers, the American clothing store chain, to Marks and Spencer PLC, a major British retailer. Campeau, who acquired Brooks Brothers when he took over New York-based Allied Stores Corp. for $3.5 billion in 1986, said he would not be required to sell the chain unless he succeeds in his bid for Federated.

Campeau would in effect trade Brooks Brothers, a jewel with 45 U.S. stores and 12 in Japan, for such Federated properties as Bloomingdale's.

Campeau provided details of financing commitments for at least $1.9 billion. He added in a letter to the Federated board that First Boston Corp. is "highly confident" it can provide up to $1.5 billion in short-term bridge financing.

Ignoring the six management directors, Campeau urged outside Federated directors to meet, promising that "at such time, we would be prepared to consider an increase in our $66-per-share price."