Transurban Group turned down a $7.2 billion takeover bid from its three Canadian shareholders, stating the offer undervalued the company.

Its three shareholders – Australian fund manager CP2 Limited, the Canadian Pension Plan Investment Board, and the Ontario Teachers' Pension Plan put up a A$5.57 a share, which is 14 per cent higher than Transurban's last traded price. It was also known that its A$5.25-a-share offer was also rejected six months ago by the company.

An infrastructure analyst from Austock Group commented that Transurban is worth more than A$6 a security.

“There’s still a reasonable gap between what Transurban is worth and what the Canadians are offering,” Andrew Chambers said of Austock Group.

The 42.4 percent combined funds from the Canadian shareholders, are interested in the company's assets, including the Pocahontas 895 in Virginia and four Sydney toll roads.

Transurban announced it will conduct a share sale to boost its funding for the acquisition of the Sydney Lane Cove Tunnel.

Transurban's shares were put into a trading halt in Sydney as it was set to A$542.3 million equity sale, at A$4.60 per share. If the company refuses to partake in the share sale, they should offer more of their stakes on the bid.

In a statement released by the company today through the Australian Stock Exchange, the offer was “inadequate price for control of Transurban given its performance and prospects.”

Transurban said that abandoning its plan to sell its shares is out of the question.