By Scott Murdoch and John Biju
SYDNEY (Reuters) -Australia's Orora Ltd shares spiked more than 15% after it said on Tuesday it had rejected a A$3.42 billion ($2.25 billion) takeover offer from U.S. private equity firm Lone Star Fund, claiming the offer materially undervalues the packaging products maker.
Under the offer, Orora shareholders would have received A$2.55 per Orora share from Lone Star, a 33.9% premium to the stock's last close.
The company said its board had determined it was not in the best interest of its shareholders to engage further with Lone Star over the offer, which it described as opportunistic, non-binding and conditional.
Lone Star did not immediately respond to a request for comment sent by Reuters outside U.S business hours.
Orora shares rose to A$2.20 in early trade on Tuesday.
Ahead of Tuesday's share price rise, Orora's shares were down 26.7% so far this year, according to LSEG data.
Orora stock has slumped about 42% since the company agreed to buy French high-end glass manufacturer Saverglass for $1.4 billion last September.
The Australian company said it would now release its full-year financial results on Wednesday and share an update on the progress it is making against its strategy.
($1 = 1.5184 Australian dollars)