"TeliaSonera is really in good shape, so the pressure is ... on France Telecom to raise the bid," Evli Bank analyst Michael Andersson told AFP.
He said several other big telecom players like Germany's Deutsche Telekom and Norway's Telenor appeared to be eying the company.
"I believe this bid is only an opening negotiating gambit from France Telecom," another Stockholm-based analyst said.
France Telecom launched an informal bid early Thursday, offering to pay around €33 billion ($51 billion) to merge with TeliaSonera and create the world's fourth largest telecom operator.
The Nordic company flatly rejected the proposal, saying it "substantially undervalues the company."
Analysts at the SEB Enskilda brokerage said it believed "a bid would have to be above 60 kronor ($10 dollars a share) to be attractive enough for TeliaSonera's shareholders," instead of the 56 kronor offered per share.
"At this low level, we would not rule out other bidders," the brokerage said.
TeliaSonera, created in a 2002 merger between Swedish Telia and Finnish Sonera, enjoys a healthy balance sheet and has a strong presence in the Scandinavian and Baltic regions, as well as Russia, where France Telecom is not well represented.
Evli Bank's Andersson said that combining the two companies would likely produce a number of synergies "which might enable France Telecom to pay a higher price."
"I think they really want to get TeliaSonera, and I think the price proposed is low," he added.'
Joining forces with Telenor, the most widely discussed alternative, would have more drawbacks and be more complicated, he said.
"It's a little bit more complicated with Telenor because they are overlapping each other in so many places in the Scandinavian countries, so they would have to sell lots of assets in Sweden, Norway and also in Denmark," he said.
"In that sense, just on paper, France Telecom would be much, much easier, I think," he said, adding that all the discussions from now on "will be about the price."
TeliaSonera itself meanwhile insists it is perfectly capable of growing its business on its own and under no obligation to merge with anyone.
"The aim of the management and the board is to grow the company on its own merits ... That's the main alternative," TeliaSonera spokeswoman Cecilia Edström told AFP.
Swedish Financial Markets Minister Mats Odell, representing the TeliaSonera's largest shareholder, the Swedish state, supported its decision to reject the French bid.
"My preliminary conclusion is that the bid from France Telecom does not correspond to TeliaSonera's full potential and worth. I thus share the TeliaSonera board's interpretation of today's bid," Odell said in a statement.
The Swedish state owns a 37.3 percent stake in the telecom group, while Swedish institutions and companies own 18.2 percent and the Finnish state owns 13.7 percent.
The government in Stockholm has previously said it plans to sell its TeliaSonera stake along with its holdings in five other companies, and in May 2007 it sold eight percent of the shares to institutional investors.
The government's plans in no way "mean we are forced to accept the offer from France Telecom or any other interested parties if it's not attractive to the shareholders," Edström insisted.