Shares of corrugated packaging and building products maker Temple-Inland Inc. (TIN) soared Monday after the market closed, following an unsolicited takeover bid from International Paper (IP) for $30.60 a share, or $3.38 billion.

Temple-Inland quickly rejected the offer.

International Papers all-cash offer represents a 44% premium over Temple-Inlands price of $21.21 at noon ET on Monday. According to a press release, Temple-Inland received a verbal proposal on May 17, 2011, prior to a subsequent call, face-to-face meeting and two letters of correspondence between the chairmen of both companies.

Temple-Inlands board unanimously voted to reject the offer and informed International Paper on June 4, 2011, stating in a statement released Monday that the proposal grossly undervalues Temple-Inland and was not in the stockholders best interest.

Through our proven ability to execute our strategy focused on maximizing return on investment (ROI) and profitably growing our business, the Board believes the company will continue to provide superior results for our stockholders," said Doyle R. Simons, Chairman and CEO of Temple-Inland, in the statement. "As the economic recovery continues and the benefits from our strategy continue to be realized, it is the stockholders of Temple-Inland who should gain from those anticipated benefits, not the stockholders of IP."

International Paper chairman and CEO John Faraci said the company was very disappointed, by Temple-Inlands response.

"We believe that our proposal offers clearly superior and compelling value to Temple-Inland's shareholders, Faraci said. Our proposal reflects the future business plans and economic outlook for Temple-Inland and for the sector, and incorporates a significant portion of the cost savings resulting from the merger of International Paper and Temple-Inland, while at the same time creating value for International Paper shareholders."

In a letter to Simons dated Monday, Faraci said International Paper would likely take the offer directly to Temple-Inland shareholders, citing the fact that shareholders had only received returns of 6% per year since 2008, including reinvested dividends.

Temple-Inland shares soared $9.06, or 43.07%, in after-hours trading on Monday, after closing the session at $21.01 a share. International Papers stock closed at $29.65 on Monday and rallied 3.5% after the bell.