Australian beer giant Foster's Group on Thursday rejected British-based SABMiller's US$10-billion hostile takeover bid, saying the offer price was too low.
SABMiller, the world's second biggest brewer, which makes beers Grolsch and Miller Lite, decided to take its offer direct to shareholders on Wednesday after its initial approach for the same price was rejected in June.
But Foster's management again knocked it back, saying it undervalues one of Australia's best known brands.
"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 Aus$4.90 per share significantly undervalues the company in the context of a change of control.
"Foster's shareholders are advised to take no action and ignore all documents and communications from SABMiller in relation to its proposed offer," it added.
The offer is the largest takeover bid in the sector since Dutch brewer Heineken swallowed Mexican firm FEMSA last year for 5.3 billion euros.
The prospect of a bid for Foster's has been anticipated since a recent demerger of its beer and wines businesses, and amid consolidation in the Australian beverage industry.
Foster's, which owns Australia's largest brewer Carlton and United Breweries, recently split its beer division from its underperforming wine assets which have been hit by a grape glut and a soaring Australian dollar.
Any takeover requires approval from Australia's Foreign Investment Review Board and the competition watchdog, the Australian Competition and Consumer Commission.