BREWER Fosters has rejected a takeover approach worth £6.2bn from Grolsch owner SABMiller.

The Melbourne-based company told SAB that its conditional proposal of 4.90 Australian dollars a share, representing an 8 per cent premium on the companys share price yesterday, significantly undervalued the business.

SABMiller is the worlds second-biggest brewer by volume and has global brands including Pilsner Urquell, Peroni Nastro Azzurro and Miller Genuine Draft.

It said its proposal was driven by Australias profitable beer market, in which Fosters is the leading brewer with seven of the top 10 beer brands, as well as a national distribution network and scale production.

Chief executive Graham Mackay said: "We continue to believe that the proposal price is attractive and offers good value to Fosters shareholders."

He added the company would continue to seek talks with the Fosters board and deliver an agreed proposal for consideration by the companys shareholders.

Fosters has become the subject of takeover speculation after it sold off its under-performing wine business into a separately listed company in May.

Analysts said that other global brewers were now likely to be mulling their options over Fosters following the SABMiller bid rejection.

Fosters leading brands include VB, Carlton Draught and Corona, while it is also the largest cider producer in Australia.