(Add background and analyst quotes) By Nivedita Balu, Krystal Hu and Eva Mathews Aug 15 (Reuters) - Gaming software maker Unity Software Inc on Monday rejected AppLovin Corp's $17.54 billion takeover offer and said it would go ahead with its planned purchase of ironSource. AppLovin, which competes with ironSource in helping developers grow and monetize their apps, offered to buy Unity in an all-stock deal last week on the condition that it drops the $4.4 billion bid for Tel Aviv-based ironSource.. Unity said on Monday AppLovin's offer was not in the best interest of shareholders and decided it would not qualify as a "Superior Proposal" as defined in Unity's merger agreement with ironSource. Shares of Unity, whose platform has been used to build some of the most-played games such as "Call of Duty: Mobile" and "Pokemon Go", were down about 6.8% in morning trading, while those of ironSource surged about 13.4%.