Easco Corp. of Baltimore, a toolmaker and metals producer, said yesterday that its board of directors unanimously rejected the $18.50-per-share takeover bid made by Equity Group Holdings, a D.C.-based private partnership that is engaged in real estate and manufacturing operations.

Easco also said it has sued Equity Group in federal court in Maryland, alleging that 1.1 million shares -- or 15.8 percent of Easco's common shares outstanding were illegally acquired by Equity.

An Equity Group spokeswoman said she had no comment on the takeover bid or the lawsuit.

"Easco's stock has tremendous long-term value," said Ernest Kiehne, senior vice president of Legg Mason Wood Walker Inc., who follows Easco. "I'm sure Easco's board of directors recognizes this and feels that the Equity Group offer of $18.50 is completely inadequate."

Equity Group made an offer to acquire Easco through a cash merger transaction in which Easco shareholders would receive $18.50 a share. Since Easco has about 9.2 million outstanding shares, including two convertible bond issues, the acquisition price would work out to about $171.5 million.

Steven M. Rales and Mitchell P. Rales, the sole partners in Equity Group, now own about 15.8 percent of Easco's outstanding shares, which they acquired over the last four months. According to a Securities and Exchange Commission filing, between Dec. 31 and Jan. 4, Equity purchased 65,000 Easco shares on the open market for prices ranging from $16.25 to $16.87 per share

The Rales also hold about 39 percent of the stock in Danaher Corp., a West Palm Beach, Fla., company with manufacturing and real estate interests.

Equity Group wanted to acquire Easco's remaining outstanding stock in a cash merger with a company to be formed by Equity Group, Easco officials said. In a Jan. 4 letter to Easco's board of directors, Steven Rales said the proposed offering price was a "substantial premium above recent market prices and book value per share . . . and was attractive to your [Easco's] shareholders."