UPDATE 1-Australia's Transurban rejects Canada funds' bid

Published: 04 Nov 2009 17:43:12 PST

* Transurban open to takeover talks

* Shares surge 20 percent to nine-month high (Adds share reaction)

MELBOURNE, Nov 5 - Australian toll road operator Transurban Group <TCL.AX> rejected a takeover approach from two Canadian pension funds on Thursday, but said it would be open to talks on bona fide proposals, sending its shares up 20 percent.

It said the offer came from the Canada Pension Plan Investment Board and the Ontario Teachers Pension Plan Board, which together own about 26 percent of the group.

Transurban made the announcement after media speculation that Ontario Teachers Pension Plan Board was planning a A$6 billion ($5.5 billion) buyout of Transurban.

Transurban shares soared to as high as A$5.25 and last traded up 15 percent at A$5.03.