SYDNEY, Aug 13 (Reuters) - Australia's Orora Ltd ( ORRAF )

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 ( ORRAF ) shareholders would have received

A$2.55 per Orora ( ORRAF ) 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 ( ORRAF ) shares rose to A$2.20 in early trade on Tuesday.

Ahead of Tuesday's share price rise, Orora's ( ORRAF ) shares were

down 26.7% so far this year, according to LSEG data.

Orora ( ORRAF ) 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)