Jan 25 (Reuters) - Comtech Telecommunications Corp rejected Acacia Research Corp's $790 million buyout proposal on Tuesday, saying the offer "grossly" undervalued the company.

Backed by activist hedge fund Starboard Value, Acacia had offered to buy Comtech, a provider of wireless communication systems for police and other emergency services, in October.

"The proposal grossly undervalues the company and is not in the best interests of Comtech's shareholders," the company said.

The bid had come at a time when Comtech was facing pressure from one of its shareholders, Outerbridge Capital Management LLC, to explore a sale of the entire company.

Comtech shares rose 26% on the day when Reuters reported Acacia's offer for the company, and are down 4.3% since then. (Reporting by Chavi Mehta in Bengaluru; Editing by Saumyadeb Chakrabarty)