Melbourne - Australia's Foster's Group has rejected a A$9.5-billion takeover offer from global brewing giant SABMiller as too low, offering only a slim premium for Australia's largest brewer.
Foster's said it received an offer of A$4.90 per share from SABMiller, a premium of 8.2 percent to Monday's closing price of A$4.53.
“The board of Foster's believes that the proposal significantly undervalues the company in the context of a change of control and, as such, it does not intend to take any further action in relation to it,” the company said in a statement.
Foster's has been the subject of takeover talk since it announced plans last year to spin-off its struggling wine operations, which was seen as a deterrent to potential suitors.
Foster's beer operations and the spun off wine business, Treasury Wine , were listed separately on the stock exchange last month.
Foster's is seen as an attractive asset for its high margins and 50 percent market share in Australia, although beer volumes have sagged in recent months with a poor summer and consumer downturn.
UBS analysts say Foster's margins for beer are about 37 percent, nearly double global peers.
Clearing the way for SABMiller to bid, Australian soft drink bottler Coca-Cola Amatil said earlier it has amended its joint venture terms with SAB to enable the brewer to bid for Foster's.
C-C Amatil said the sides amended their Pacific Beverage joint venture, so that SABMiller would buy out Amatil's share for up to A$380 million.
Amatil added it does not want to make an offer for Foster's in its own right.
“These amendments are designed to deal with the situation where SABMiller wishes to acquire Foster's and we don't,” Amatil managing director Terry Davis said.
He said SABMiller does not want to make a joint bid for Foster's unless it won operational control of Australia's largest brewer. - Reuters