UPDATE 2-Kinbauri rejects Orvana's C$29.3 mln takeover offer

* Orvana's C$0.55/shr offer at 39 pct premium

* Kinbauri sees more value in Glen Eagle investment deal

* Kinbauri sees Glen Eagle deal closing May 28 (Recasts adds Kinbauri's view, updates share movement)

May 11 (Reuters) - Canada's Kinbauri Gold Corp (KNB.V: Quote, Profile, Research) rejected a C$29.3 million ($25.50 million) takeover offer from Orvana Minerals Corp (ORV.TO: Quote, Profile, Research), as an investment deal with Glen Eagle Resources Inc (GER.V: Quote, Profile, Research) was on the cusp of completion.

Earlier in the day, Orvana proposed to buy Kinbauri for 55 Canadian cents in cash, after the company failed to negotiate a deal with Kinbauri's management.

On the other hand, Glen Eagle had on April 17 offered to invest C$32 million in Kinbauri for a 45 percent stake in Kinbauri Espana unit, which hold interests in the El Valle/Carles gold and copper project in northwestern Spain.

Although Orvana's offer is at a premium of 39 percent to Kinbauri's Friday close, Glen Eagle's investment "implies a value for Kinbauri of C$1.60 per share," without considering other assets.

"To now sell our company at this price would be without recognition of its true value and without recognition of upside from development and production of the property to shareholders," Kinbauri Chief Executive Vern Rampton said in a statement.

Orvana, however, said Kinbauri's largest shareholder Dynamic Precious Metals Fund, with over 8 percent stake, has entered into a lock-up agreement in support of its bid.