S&P/ASX200-listed Aevum Ltd. rose in Sydney trading after the Australian retirement village operator turned down an A$266-million ($242 million) unsolicited buyout proposal from its biggest shareholder, Stockland.

Sydney-based Aevum said in a statement to the Australian stock exchange, Stockland, offered A$1.50 for each share, a price that "significantly undervalues" the company.

The offer is a 38 percent premium to Aevum's closing price of A$1.09 on July 30. Aevum's shares surged 42 percent to close at A$1.545 at 4:10 p.m. in Sydney on Monday since November 2004.

Stockland, the country's biggest diversified property firm said in a separate company filing that "joining the two businesses, and utilizing our position as Australia's largest diversified property group, would provide greater diversity and scale to the benefit of Aevum's stakeholders including employees and residents," Matthew Quinn, chief executive officer said.

Stockland added that though it does not intend to review its bid at the moment, it did not discount the possibility of directly negotiating with other shareholders in Aevum to acquire its majority stocks.

Stockland intends to pay for the takeover from its cash reserves, the Sydney-based company said in the statement.