By Michael Flaherty

(Reuters) - A major shareholder of NorthStar Realty Europe Corp (>> Northstar Realty Europe Corp) has offered to buy the company for $13 per share and is demanding that the real estate investment trust (REIT) pursue a new asset management contract, according to a letter seen by Reuters.

Bow Street LLC said in the letter dated on Friday that its $728 million offer is fully financed. Bow Street owns a 6.7 percent stake in the company. Blackstone Group (>> Blackstone Group LP) provided seed capital to Bow Street when it first launched and no longer has money invested with the hedge fund.

Bow Street is also demanding that NorthStar Realty Europe sever its asset management contract with NorthStar Asset Management Group Inc (>> NorthStar Asset Management Group Inc).

Shares of NorthStar Realty Europe jumped 5 percent to $12.39 after the Reuters report on the offer, after earlier trading flat.

NorthStar is a network of inter-connected real estate investment trusts, which have all come under attack from activist investors in the last year.

NorthStar Asset Management (>> NorthStar Asset Management Group Inc), its former parent NorthStar Realty Finance Corp (>> Northstar Realty Finance Corp) and Colony Capital agreed to merge into a single REIT in June.

NorthStar Asset Management manages the assets of NorthStar Realty Finance and NorthStar Realty Europe. NorthStar Europe focuses on office properties in the European market.

In the letter, addressed to Chairman David Hamamoto, Bow Street also took issue with the company's corporate governance, pointing out that only one of the board's eight directors is independent of NSAM and its affiliates.

Hamamoto is the chairman of NSAM, NRF and NorthStar Realty Europe.

"We strongly encourage you and the Board to actively solicit feedback from other NRE shareholders regarding our all cash offer as well as the rejection of the Asset Management Contract," the letter said, signed by Bow Street Managing Partners Akiva Katz and Howard Shainker.

Shainker previously worked at hedge fund Third Point, while Katz worked at Brahman Capital.

The hedge fund said it has previously offered to pay $12 per share for the company.

Bow Street was also involved in the sale of online jeweller Blue Nile Inc (>> Blue Nile Inc), which agreed last month to be taken private by an investor group that included Bain Capital.

(Reporting by Michael Flaherty in New York; Editing by Tom Brown and Meredith Mazzilli)