Australia's Orica, the world's largest explosives company, said on Wednesday it had rejected a A$10 billion (US$8.3 billion) takeover offer from a private equity consortium.
Orica said in a statement the consortium, comprising Bain Capital, Blackstone, Pacific Equity Partners and Morgan Stanley Principal Investments, had offered A$32.00 per share in cash -- a near 15% premium to its last traded price.
"The board of Orica has carefully considered the consortium's proposal and believes that it significantly undervalues Orica and its growth prospects," Orica Chairman Don Mercer said in a statement.
Orica shares, which have risen 15% so far this year closed on Tuesday at A$27.89, valuing the group at A$8.5 billion. A $32.00 bid values the firm at almost A$10 billion.
Orica said in December, its low debt levels make it vulnerable to a private equity buyout, but it also needed to cushion against potential downturns.
Private equity accounted for one-fifth of Australia's record level of takeovers last year.
Resource sector demand and the sale of its fertilizer interests have driven earnings at the company, also Australia's largest paints and chemicals supplier.
It has also bought U.K.-based mining service firm Minova and assets formerly owned by rival Dyno Nobel.
"Integration of recent acquisitions is progressing well, with synergies flowing through in line with, or ahead of, plan," Mercer said, saying Orica was confident with previous 2007 earnings guidance. UBS advised Orica.