* Western Wind says Algonquin offers C$2.50/shr
* Western Wind estimates its worth to be over double offer price
* Algonquin says not made formal offer yet
* Algonquin says expressed non-binding interest in Western Wind
* Algonquin says held talks with largest shareholders in Western Wind (Adds Algonquin's response, Western Wind spokesman comments, updates stock move)
Oct 11 (Reuters) - Western Wind Energy said it received an unsolicited takeover bid from Algonquin Power and Utilities for at least C$150 million ($145.5 million) and urged its shareholders to reject what it called a "low-ball" offer.
In a separate statement, Algonquin said it had expressed "non-binding" interest in discussing a potential takeover with Western Wind's board of directors but denied making a formal bid.
Western Wind estimates its value is more than double Algonquin's offer price of C$2.50, which is 88 percent higher than the stock's Friday close.
Western Wind shares closed up 58 percent at C$2.10 on Tuesday on the Toronto Venture Exchange -- about 40 Canadian cents below the offer price, suggesting investor doubts over the deal.
Meanwhile, Algonquin said it has held discussions with Western Wind's largest shareholders regarding a potential buyout and is confident of getting their support for a deal.
Western Wind is on the verge of going on-line with its flagship Windstar project, after signing a 20-year contract in December to supply electricity to Southern California Edison.
The Vancouver-based wind energy developer also started a 10.5 MW wind and solar project in September in Arizona.
The company expects these two projects to generate C$14 million in free cash flow, Western Wind's spokesman Lawrence Casse told Reuters.
In May, Algonquin acquired Atmos Energy Corp's assets in Missouri, Illinois and Iowa for about $124 million to expand its regulated utility operations.
According to Algonquin's website, it owns and operates $1.1 billion in renewable electric generation and sustainable utility distribution businesses in North America.
"A large U.S.-based corporation, with a substantial U.S. tax appetite, is the only entity that can offer the full value to the Western Wind shareholders," Western Wind said in a statement. ($1 = 1.031 Canadian Dollars) (Reporting by Aftab Ahmed and Gowri Jayakumar and Aftab Ahmed in Bangalore; Editing by Maju Samuel, Viraj Nair)