Foster's urges rejection of SABMiller's takeover bid

Beer bottles
Image caption Foster's has been the subject of takeover talks since it split its beer and wine business

Foster's, Australia's largest brewer, has recommended that its shareholders reject SABMiller's latest takeover bid, saying it "undervalues" the firm.

The board of Foster's had rejected SAB's initial 9.5bn Australian dollars ($10bn; £6.1bn) offer back in June, saying then that it was too low.

Since then SABMiller has gone hostile, saying it intends to make a second offer, direct to Foster's shareholders.

Foster's has been the subject of takeover rumours since last year.

"The board of Foster's, together with its advisers, has carefully considered the proposed offer and intends to unanimously recommend shareholders reject the offer," Foster's said.

"The board of Foster's reiterates its belief that an offer price of A$4.90 per share significantly undervalues the company in the context of a change of control."

SAB, which owns brands such as Grolsch and Peroni, had said the bid was attractive and should be put to shareholders.

It must gain the acceptance of at least 90% of Foster's shareholders for the takeover attempt to succeed.

There have been talks of a takeover of Foster's since it announced plans to break itself into two parts last year.

The brewer spun-off its troubled wine business, which had been seen as deterring potential suitors.

Any purchase of Foster's by SAB will not include the Foster's lager brand in the UK and Europe, where it is owned by Heineken.

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