Foster's Group Ltd., Australia's biggest brewer, said Thursday it had again rejected a $10 billion cash takeover offer from London-based rival SABMiller PLC, reiterating that the bid significantly undervalues the company.
Foster's board of directors said it intends to unanimously recommend shareholders reject the offer of Australian dollars 4.90 ($5.14) a share.
"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 in a statement.
Foster's shares were up 0.8 percent at AU$5 on Thursday.
The Australian brewer said the offer also was diminished by conditions attached, including 90 percent acceptance by Foster's shareholders.
The takeover also requires approval from government regulator Australia's Foreign Investment Review Board and the competition watchdog, the Australian Competition and Consumer Commission.
"The high level of conditionality further detracts from the proposed offer," the Foster's board said.
The bid is similar to a proposal put to Foster's by SABMiller in June, which Foster's also rejected as undervaluing the company.
SABMiller, one of the world's largest brewers, said Wednesday it is taking the cash offer, minus any dividend Foster's chooses to pay out, straight to shareholders and that the offer would be funded by existing resources and new debt.
The maker of Peroni, Grolsch and Miller Lite said Foster's had so far declined to consider the June offer.
SABMiller had said in June that Foster's was attractive because it was Australia's leading brewer with seven of the top 10 beer brands, and buying the company was consistent with its strategy to spread globally. It considers Australia an attractive market because of its population growth and economic connections to Asia.
SABMiller, which is listed in London and Johannesburg, said it had a proven track record of integrating brewing companies and improving the performance of those businesses.
SABMiller said it had decided to make the offer to the shareholders directly as Foster's board showed "no willingness" engaging with the offer.
Peter Esho, chief market analyst of Australian stockbroker City Index, said SABMiller had not increased its offer but had made it official, putting it to Foster's shareholders in the absence of other bidders.
Esho said to fend off the bid, Foster's needed to show that the market's estimate for its earnings were too low and the SABMiller offer was, therefore, unreasonable.
Foster's is due to report its annual financial results on Tuesday next week.