Shares of the New York company at last check were up 15% at $9.55. The stock has traded on Tuesday up as much as 18% at $9.75.
On Nov. 4, Paramount Group said, Bow Street offered to buy the company for between $9.50 and $10 a share cash.
Paramount's board unanimously determined that the proposal was inadequate and significantly undervalued the company, the company said. The board made the determination after discussions with and a presentation from Bow Street and then an evaluation with financial advisers, Paramount said.
The board also considered Paramount's assets and platform and "the outsized but temporary impact the covid-19 pandemic is currently having on the real estate industry," Paramount said.
The board noted that Paramount's stock price had increased 40% since drugmakers Moderna (MRNA) - Get Report and Pfizer (PFE) - Get Report announced the efficacy of their respective vaccine trials to fight covid-19.
"While we are pleased Bow Street recognizes that Paramount’s value significantly exceeds the value implied by current trading prices, the board determined that Bow Street’s proposal is wholly inadequate, opportunistic in its timing and significantly undervalues the company and its compelling prospects for long-term value creation," Albert Behler, Paramount's chairman, president and chief executive, said in a statement.
Paramount also said Bow Street’s proposed pricing range was materially lower than its pre-covid-19 trading levels.
Paramount's stock price has fallen 30% from $13.72 at year-end 2019. The stock traded at a 52-week high $15 in February. The stock has bounced off a 52-week low $5.54 set in late October.
Behler added that the company is open to all opportunities to enhance value for stockholders.