Adds SGH declined to comment, in paragraph 6

By Scott Murdoch

SYDNEY, Jan 9 (Reuters) - BlueScope Steel's BSL.AX largest investor, AustralianSuper, said on Friday a $9 billion takeover offer from SGH SGH.AX and U.S.-based Steel Dynamics STLD.O undervalued the steelmaker and that it supported the firm's decision to reject the offer.

The pension fund holds 13.52% of BlueScope, after announcing on Thursday its stake had increased from 12.5%.

BlueScope rejected the SGH and Steel Dynamics A$30 per share offer on Wednesday, saying it "very significantly undervalued" the company and accused the acquirers of trying to buy BlueScope "on the cheap".

"We support the BlueScope board's decision to reject the offer and to remain focused on executing the company’s strategy without distraction," an AustralianSuper spokesperson said.

"The current offer for BlueScope does not reflect what we presently believe is the underlying value of the business. Based on our current valuation, we would only support a transaction that was materially higher than the price of A$30 per share currently proposed."

SGH declined to comment and BlueScope did not immediately respond to a request for comment on AustralianSuper's statement.

Australian pension funds are playing an increasingly active role in corporate buyouts with AustralianSuper scuppering Brookfield's $10.6 billion offer for Origin Energy ORG.AX. The pension fund, which is Australia's largest, said at the time the bid undervalued Origin.

(Reporting by Scott Murdoch; Editing by Cynthia Osterman and Muralikumar Anantharaman)

((Scott.Murdoch@thomsonreuters.com;))