Foster’s has rejected a takeover bid from global giant SABMiller complaining the seven billion euros cash offer is too low.
However investors say Australia’s largest brewer is likely to accept a slightly better offer.
Foster’s has high profit margins and a 50 percent share in its home market.
Smaller brewers are being bought by bigger ones in the face of rising raw materials costs and slowing growth in mature markets.
Foster’s is one of the last major prizes in the global beer market.
SABMiller, which makes Peroni, Grolsch and Miller Lite, has long been seen as the favourite to take over Foster’s, since rivals such as Heineken are struggling with heavy debt or lack adequate funding.
“This is probably round one. (SAB) is a big global player and this is a very good margin business versus its peers,” said Jason Beddow, chief executive at ARGO Investments, which holds Foster’s shares.
Foster’s has been the subject of takeover talk since it announced plans last year to spin off its struggling wine operations which have been losing money.