(Adds Praemium's response, details on proposal, share movement)...

(Adds Praemium's response, details on proposal, share movement)

Nov 2 (Reuters) - Australian wealth manager Netwealth Group (NWL) said on Tuesday it has offered to buy Praemium Ltd (PPS) for A$785 million ($590.40 million) to beef up its platform for asset management.

The wealth manager's bid consists of one company share for every 11.96 shares of Praemium, implying a bid of A$1.5 apiece. The offer represents a 20% premium to Praemium's last close.

Praemium said in a separate statement that the offer undervalues the company, but it would be open to engaging with the bidder.

"Any proposals put forward should appropriately reflect Praemium's market position and growth potential as well as recent activity in the sector," the company said.

Its shares jumped 19.3% to a record A$1.485 in early trade. Netwealth said the combined group would account for an Australian funds under administration platform of about A$72 billion with another A$22 billion in non-custodial assets.

The wealth manager added that the combined group would also be the largest independent wealth management platform in Australia by net flows. ($1 = 1.3296 Australian dollars)