Ferrovial Servicios has offered $1.95 for each share, valuing the company at close to $1 billion, Transfield said in a statement on Monday.

"The Board of Transfield Services has considered Ferrovial's proposal with the company's advisers and has formed the view that the price of $1.95 per share does not reflect the underlying value of Transfield Services shares," chairman Diane Smith-Gander said.

Transfield said it is willing to give Ferrovial access to its books for "limited due diligence on a non-exclusive basis".

""Transfield Services will advise shareholders of the outcome of the discussions with Ferrovial as soon as practicable. The process may take some time and there can be no certainty that an acceptable proposal will eventuate."

Shareholders will also be given a financial update at the company's November 5 annual general meeting.

The company revealed last month it had swung to a full-year net profit of $53 million from a hefty $254.5 million loss a year earlier as income from its core Australian and New Zealand infrastructure operations offset falls in its American business.

Transfield's shares closed at $1.50 on Friday, giving it a market capitalisation of $769 million.

Transfield Holdings, a privately held company owned the contractor's founding family, last month sold its 11.3 percent stake in Transfield Services for more than $90 million.

More to come