UPDATE 2-Brazil's BR Malls open to deals after rejecting Aliansce bid-source

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By Gabriel Araujo

SAO PAULO, Jan 14 (Reuters) - Brazil's BR Malls remains open to discussing a potential merger or takeover after rejecting an offer from smaller rival shopping mall operator Aliansce Sonae on Friday, a source close to the negotiations said.

BR Malls' shares jumped 6.6% to 8.38 reais in late afternoon trading, while those of Aliansce Sonae were up 2% at 20.00 reais. Brazil's Bovespa stock index rose about 1%.

Aliansce Sonae announced its bid early in the day, confirming a move expected since late December.

BR Malls shareholders would receive 50% of the new company plus a 1.35 billion reais ($244.18 million) cash payment, about 20% of BR Malls' market capitalization, according to a securities filing.

Aliansce said that what it called a merger of equals would generate "several growth opportunities," but the BR Malls board rejected the offer unanimously.

"The board understands that said proposal considerably underestimates BR Malls' fair economic value and that of its asset portfolio and, consequently, the unsolicited offer does not serve BR Malls' shareholders best interests," BR Malls said in a separate filing.

Still, it added that its board "constantly assesses strategic alternatives that can create value for the company and its shareholders."

Aliansce Sonae has a market capitalization of 5.21 billion reais, compared with 6.85 billion reais for BR Malls, Refinitiv Eikon data showed.

According to the source, BR Malls saw the proposal more as an acquisition than as a merger of equals. The company believed the offer undervalued its and that it should have built in a premium to the market price, the source said.

Aliansce is backed by the Canada Pension Plan Investment Board (CPPIB) fund and has European mall operator ECE and founder and chairman Renato Rique as major shareholders, while BR Malls has a more diffuse ownership.

($1 = 5.5286 reais) (Reporting by Gabriel Araujo Editing by Jason Neely, David Goodman and Cynthia Osterman)