CALGARY -- Bonterra Energy Corp. says a hostile buyout offer by Calgary-based rival Obsidian Energy Ltd. is more of a "take-under" than takeover bid because it's out of step with its market value.

In a firm rejection of the offer to pay two Obsidian shares for each Bonterra share, the target company's board of directors notes that holders of 30 per cent of its shares have committed to not tender their stock, including all of its directors and management.

"The hostile bid is highly opportunistic and timed to deprive shareholders of recent positive market changes and value-increasing initiatives achieved to date and that are being pursued by Bonterra," the company said in a news release.

The share price of Bonterra has consistently been greater than two times the Obsidian share price on the Toronto Stock Exchange since the idea of a merger was put forward in the form of a letter to Bonterra chairman and CEO George Fink in August.

On Tuesday, Bonterra's stock rose three cents to close at $1.13 and Obsidian fell by half a penny to 47.5 cents.

Obsidian says the merger would pay off by creating a "Cardium champion" from the two companies' assets in regions prospective for that oil and gas-bearing underground formation, while providing financial strength to add to that base by buying other Cardium lands.

But such arguments are dependent on commodity prices that are higher than the current forward strip and "questionable" given the debt burden of both companies, said analyst Christopher Jones of Haywood Capital Markets in a report to investors.

He and analyst Cody Kwong of Stifel FirstEnergy both pointed out that financing commitments from government business lending programs give Bonterra more time to consider its options.

The company recently received a $45-million Business Development Bank of Canada term facility, along with a reserve-based lending commitment from Export Development Canada of up to $38.4 million.

It also reported its vendors have been approved for $21 million of funding through Alberta's Site Rehabilitation Program to reclaim inactive wells and pipelines, thus reducing those liabilities on its balance sheet.

Bonterra says investment firm Peters & Co. Ltd. has delivered a written opinion to the board that the offer is financially inadequate.