UPDATE 2-Forth Ports rejects fresh 640 mln stg bid approach

* Forth snubs consortium's third takeover proposal

* New proposal is 1,400 pence/share, excluding div

* Forth shares 8.3 pct up

(Adds comments from consortium)

By Rhys Jones and Paul Sandle

LONDON, April 28 (Reuters) -Forth Ports Plc FPT.L, Britain's only listed ports company, said it had rejected a new 640 million pounds ($977 million) takeover approach from a trio of its shareholders, saying it still failed to reflect the group's value.

In a statement Forth said the new proposal is for 1,400 pence per share in cash, excluding its proposed final dividend of 19.1 pence per share. "The board is of the unanimous view that the revised proposal falls far short of the value of Forth Ports," the group said.

But the Northstream consortium, which holds a 27.4 percent stake in Forth, hit back, saying its increased bid was a "highly compelling proposition" comparing favourably with previous UK port deals, which came in better debt and equity markets.

Shares in Forth Ports, which have risen 11 percent in the last three months, were up 8.3 percent at 1,346 pence by 1400 GMT, valuing the company at around 616 million pounds.

Forth Ports had last month rejected a second bid approach from the consortium, which is made up of AEIF General Partners, Peel Ports Holdings and RREEF, which valued the Scotland-based company at 1,340 pence per share.

The rationale for the deal centres on Forth's Ports and Recycling division, for which it is offering 1,285 pence a share, Northstream said.

However, it is also offering 115 pence a share for its property assets, representing a 59 percent premium to their adjusted valuation by consultancy DTZ on Dec. 31, 2009, although it said they were "very long-term assets" and there were risks associated with their development.

Northstream also said it would be willing to consider offering shareholders an option of taking cash for the Ports and Recycling business and "a paper instrument" providing continuing exposure to its property assets.

It also said there had been a "lack of engagement" from Forth towards its approaches and said it wanted the backing of the company's board for any offer. (Editing by Victoria Bryan and David Holmes) ($1=.6549 Pound)