Brewer SABMiller took its hostile $10 billion bid for Australia's Foster's directly to shareholders, according to Aug. 17 reports.

SABMiller bid $A4.90 per share for Foster's in June, valuing Foster's at A$9.5 billion ($10 billion), but Foster's CEO John Pollaers deemed the offer too low to consider. SABMiller then took the same offer directly to shareholders. Rival bidders have not stepped forward -- though Molson Coors Brewing ( TAP) and Mexico's Grupo Modelo were reportedly in talks to make a joint bid for the target, according to June 3 reports -- and Foster's is considered by some analysts to have few other options.

"I don't think the offer on the table is fair value," Paul Xiradis, CEO at fund manager Ausbil Dexia, told Reuters. "Foster's is a prized asset with strong cash flow and at probably the low point of its earnings cycle. For an iconic business, that sort of an offer is undercooking it."

Charles Stanley analyst Sam Hart said, "It is unlikely that Foster's shareholders would accept an offer at A$4.90, but it could be the catalyst for the Foster's board to engage with SAB and agree a recommended offer of up to A$5.40."

Fosters' attractiveness stems from its high margins -- said to be around 37% for beer, nearly double that global competitors -- and 50% market share in Australia.

Should a deal go through between SABMiller and Foster's, it would be the biggest consolidation in the brewing industry since InBev acquired Anheuser-Busch ( BUD) for $52 billion in 2008. That deal marked the biggest cash takeover on record.

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