UPDATE 4-Castellum launches rival bid for Norway real estate group Entra

* Castellum’s bid for Entra exceeds SBB’s offer

* Tie-up would create largest Nordic real estate group

* Norway government agrees to sell 8.2% Entra stake to Castellum

* More bids may emerge, analyst says (Add analyst, update shares)

OSLO, Nov 26 (Reuters) - Real estate company Castellum launched a 30.8 billion Norwegian crown ($3.5 billion) cash and shares takeover bid for Norway’s Entra ASA on Thursday, exceeding an offer from rival Swedish firm SBB .

Castellum’s bid for Norway’s biggest listed real estate company came after it made an informal approach to Entra on Wednesday but was rejected with Entra saying it wanted to remain independent.

On Thursday Entra said that it would evaluate Castellum’s bid, which was supported by the Norwegian government, a shareholder in Entra, and would create Scandinavia’s largest real estate company.

“The board will, with the assistance of its advisers, in due time diligently consider such offer, including its financial terms, and a further announcement will be made when appropriate,” Entra said in a statement.

Castellum’s bid equated to 170.86 Norwegian crowns per Entra share, while rival bidder SBB on Tuesday had made a bid proposal worth 165 crowns per share.

More bids could emerge however, either from SBB or from private equity players or wealthy Norwegian investors, brokers Carnegie said in a note to clients.

“We would not rule out a counter bid up to a maximum of NOK 200 per share,” Carnegie said.

In a sign that investors also expect more bids, Entra’s shares rose 4.1% to close at 175.5 crowns, above the current offer price, while Castellum’s shares rose 0.3%.

“The combination of Castellum and Entra will create a new Nordic region champion,” Castellum said in a statement.

“Sweden and Norway will become the largest markets for the combined company with further long-term growth ambitions in both countries,” Castellum said. “This would also form the backbone for further balanced expansion in the Nordic region.”

Entra’s properties include the 26-storey Posthuset office block in Oslo, the Norwegian capital’s second-tallest building.

The Norwegian government said on Thursday that it had agreed to sell its 8.24% stake in Entra to Castellum, with the caveat that the price for the state’s shares must be increased if Castellum were to raise its bid.

“The merger would create the leading Nordic real estate firm, so this appears to be the right outcome both industrially and financially,” Norwegian Industry Minister Iselin Nyboe said of Castellum’s bid.

If the tie-up is successful, Castellum intends to seek a secondary listing of its shares on the Oslo Bourse, the company said.

Financial advisers to Castellum are J.P. Morgan and Danske Bank, while Entra is advised by ABG Sundal Collier.

$1 = 8.8200 Norwegian crowns Reporting by Terje Solsvik; Editing by Edmund Blair/Jane Merriman/Susan Fenton