News: Fosters rejects offer for wine business

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Foster's Group Ltd (ASX:FGL) says it has received an unsolicited proposal to purchase the wine assets of Treasury Wine Estates for between $2.3 billion and $2.7 billion.

The beverages company has rejected the offer, saying it significantly undervalues the business and its future prospects.

In addition the offer is said to be highly conditional and requiring exclusivity, terms that Foster's believe reduce the value and certainty of the proposal.

The company believes Treasury Wine Estates is positioned for future growth with a portfolio of global brands.

Foster's advises that the separation of the wine business from the beer business is likely to be the best outcome for shareholders, and continues to consider a potential demerger.

Foster's Group reported a net loss of $463.4 million in fiscal 2010.