• San Francisco Chronicle, Tuesday, June 21, 2011 10:16 AM

Foster's Group Ltd., Australia's biggest brewer, rejected an unsolicited A$9.5 billion ($10 billion) conditional cash takeover offer from SABMiller Plc as too low.

The Melbourne, Australia, company said the bid "significantly undervalues" the company for a change of control, and said it won't take further action on it. The offer is 8.2% higher than yesterday's closing price.

The bid is the first announced by Foster's since it spun off its wine unit. The 8.2% premium offered by London-based SABMiller compares with an average of 13.4% for brewery deals pending and completed in the past five years, according to Bloomberg data.

"I'd guess that there's room to go higher if you compare them to some recent deals," said Will Seddon, who helps oversee more than $350 million at White Funds Management in Sydney. Fosters "will just stick to the line that it undervalues the company. There have been a whole lot of transactions in that space in recent years, many of which were done at pretty high multiples," he said.

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