* Board says seeking superior proposals
* Board says Maxam has been buying shares on open market
TORONTO, Dec 22 - Canadian merchant bank C.A. Bancorp Inc (BKP.TO) urged shareholders on Tuesday to reject a C$1.22 per share bid from private equity firm Maxam, saying the offer was too low and that it was talking to third parties.
Bancorp said the offer was at a discount to current trading prices of the stock and a 49.9 percent discount to the net asset value of the company.
Vancouver, British Columbia-based Maxam, run by managing partners John Ciampi and Sean Morrison, first started looking at Bancorp in August. It made an unsolicited bid on Dec. 4, valuing the company at about C$33 million ($31 million), or less than half of what Bancorp says is its book value.
The board has initiated a process under which superior proposals, delivering greater value for shareholder, may emerge, Bancorp said in a statement, adding that the Maxam offer was conditional and not a firm offer.
Bancorp also said its financial adviser, CIBC World Markets Inc (CM.TO), considered the Maxam offer as inadequate.
The takeover attempt by Maxam, which has been buying stock in Bancorp in recent days, has attracted attention because it involves one private equity firm backed by big investors going after a publicly listed company pursuing a private equity model.
Private equity observers say Bancorp is a victim of the times, and of a public market model that demands quarterly reports and does not give wiggle room to small firms wishing to employ an investment model with longer-term returns.
Bancorp stock traded unchanged at C$1.36 a share in Toronto on Tuesday. Its year high is C$1.40 a share, reached after the Maxam offer was announced, and its year low was 33 Canadian cents, hit a year ago, at the height of the global financial crisis.
Bancorp is incorporated in Alberta but has its head offices in Toronto. It has hired CIBC World Markets, the capital markets arm of one of Canada's largest banks, as financial adviser, and Goodmans LLP as legal adviser.
Bancorp is focused on investments in small and mid-cap public and private companies, in sectors including industrials, real estate, infrastructure and financial services.
Maxam's cash offer is open for acceptance until 4 p.m. Jan. 12, 2010, Vancouver time (2400 GMT).
(Reporting by Pav Jordan; Editing by Frank McGurty)