UPDATE 1-Xstrata's A$426 mln bid for copper miner rejected

(Releads, adds Indophil's response, details)

SYDNEY, May 15 (Reuters) - Xstrata Ltd's (XTA.L: Quote, Profile, Research) A$426 million ($398 million) takeover bid for Australian-listed copper miner Indophil Resources NL (IRN.AX: Quote, Profile, Research) was rejected by Indophil, who said the Swiss-based group's offer was opportunistic.

Xstrata said on Thursday it was offering A$1 per Indophil share, a 29 percent premium to the stock's A$0.78 closing price on May 14. The offer price is also a 29 percent premium to Indophil's one month volume weighted average price.

Xstrata said it had entered into a pre-bid acceptance arrangement with Lion Selection Ltd (LST.AX: Quote, Profile, Research), the largest shareholder of Indophil, to take Lion's 17.76 percent stake in Indophil.

The agreement, subject to some conditions, will increase Xstrata's interest in Indophil's shares to 19.99 percent, Xstrata said.

Xstrata's offer for Indophil is conditional on the latter withdrawing its own takeover bid for Lion Selection or the bid failing. Indophil in March launched an all-share bid for Lion, valuing the target at as much as A$340 million.

"The Indophil board considers that the Xstrata approach is unrealistically opportunistic and is at a price that does not reflect the value of Indophil," Indophil said in a statement.

Xstrata said it would finance the offer through its existing credit facilities and cash on hand.

Indophil's main asset is a stake in the Tampakan copper project in the Philippines. Xstrata Copper also has a stake in the project. ($1=A$1.07) (Reporting by Fayen Wong; Editing by James Thornhill)