Inter-Tel (INTL - Get Report) said a special panel of its board rejected an unsolicited takeover proposal by the communications company's founder and former CEO, Steven G. Mihaylo.

Tempe, Ariz.-based Inter-Tel said Mihaylo's recent move to boost his bid to $23.25 a share in cash from $22.50 is not "sufficiently attractive to warrant departing from a thorough review of the Company's strategic options." Mihaylo said earlier this week his increased bid was contingent on Inter-Tel committing to sell itself to the highest bidder within 30 days.

On Friday, Inter-Tel indicated it would continue studying its options.

"The Special Committee believes that the Mihaylo Group's latest proposal still does not reflect the intrinsic value of Inter-Tel and its advanced technology," Inter-Tel said, "and consequently fails to provide appropriate value to all Inter-Tel shareholders."

Shares rose 3 cents Friday to $21.71.