* Eurocash offers 3.76 shares for every Emperia share
* Emperia rejects offer
(Releads with rejection)
WARSAW, Sept 14 (Reuters) - Polish retailer Emperia has rejected an all-share takeover approach by the country's top wholesaler Eurocash to create a $1.4 billion combined group, saying the offer is "grossly unfavourable" to its shareholders.
Late on Monday, Eurocash offered 3.76 new shares for each Emperia share, valuing Emperia at about 1.3 billion zlotys ($425 million).
Emperia's shares rose as much as 8 percent early on Tuesday to their highest level in two years, but slipped back after the rejection to trade up 2.5 percent at 89 zlotys by 0823 GMT, still above the value of the offer.
Eurocash shares were up 2.1 percent at 22.96 zlotys.
"In management's opinion, the parity and the additional conditions of the offer are grossly unfavourable to Emperia shareholders," Emperia said in a brief statement.
In an open letter to Emperia, Eurocash said earlier the deal would help the combined group to negotiate better deals with suppliers, optimise the use of capital, cut costs and allow for cross-selling.
"Independent stores in Poland need a strong partner," Eurocash's chief executive Luis Amaral said in the letter. "(With) cooperation with a large wholesaler... such stores will be able to fully realise its potential.
No one at Eurocash was immediately available for further comment.
Eurocash shares have gained 44 percent this year, while Emperia has risen 7 percent. Warsaw's broad WIG index is up 11 percent. ($1=3.058 zlotys) (Reporting by Chris Borowski; Editing by Greg Mahlich)