Life assurer Friends Provident has turned down a takeover offer from JC Flower, which valued the company at £3.5 billion.
The board of Friends Provident said the £1.50 per share proposal "significantly undervalues Friends Provident and its prospects and does not represent a basis for discussions."
Friends Provident added the proposal indicated the offer price would be reduced in the event the company paid shareholders the 2007 final dividend of 5.3p a share.
The company said it would focus on its strategic review announced at the end of February.
Shares in the insurer rose by as much as 4.5 per cent in morning trading to £1.25 on the news.
The JC Flowers bid is below the £4.2 billion proposed stock swap with Resolution that Friends Provident agreed to last year. However, London-based administrator of closed life funds Resolution withdrew the offer last October to pursue a separate takeover deal.
Digg 
Delicious 
Reddit 
StumbleUpon 
Google 
Technorati 
Netvouz