Britain's biggest brewer Scottish & Newcastle rejected a raised bid from Carlsberg and Heineken at 780 pence a share, or 7.6 billion pounds ($14.9 billion) on Thursday, and said it would only talk if the offer was at least 800p, heightening the prospect of the bid failing.
Carlsberg urged shareholders to put pressure on the S&N board to accept the proposed raised offer and said its consortium with Heineken would not launch a hostile bid for the Foster's and Kronenbourg brewer and the offer would lapse without a recommendation.
Shares in S&N only edged up 0.8 percent to 725p, reflecting worries the Carlsberg-led group may not gain funding for a higher bid and it may have to abandon the attempt.
Carlsberg shares were suspended initially and dipped 3.25 percent to 596 crowns after trading resumed, while Heineken was off 3.4 percent at 42.21 euros.
"Unless S&N do open up talks, there is very much a risk that the consortium will walk away," said analyst David Liston at Barclays Wealth.
The Edinburgh-based brewer said the new 780p bid "failed to be competitive" after the consortium increased its 750p cash offer, worth 7.3 billion pounds, which it made last November.
S&N added the 780p bid had not been described as a final offer, and it was only happy to talk to two of its most powerful trading rivals with a price of at least 800p per share, or 7.8 billion pounds, on the negotiating table.
S&N said the new proposal still undervalued the 50 percent share it owns in fast-growing Russia-based brewing joint venture Baltic Beverages Holding (BBH) which it runs with Carlsberg, at only some 3.5 billion pounds in equity value.
Analysts said S&N's reaction would lead to shareholder pressure for it to engage in talks with the consortium, and Carlsberg said S&N shareholders will find the bid attractive.
"We have had a dialogue with S&N shareholders during the entire process, also in connection with the raised bid. As I experience it, they believe that this bid is attractive," Carlsberg CEO Jorgen Buhl Rasmussen told Reuters.
"I expect an intensified dialogue between S&N shareholders and the management and board. All else would surprise me."
Analyst Matthew Webb at Cazenove said it would be very difficult for the consortium to increase its offer without destroying value for its shareholders, especially as Carlsberg will be paying 83 percent of the extra 30p in the raised bid.
"We believe that the refusal of the S&N board to accept the Carlsberg/Heineken consortium's 780p indicative offer as a basis for discussions is unjustified and contrary to the interests of its shareholders," he added.
Carlsberg has said it will fund its part of the bid by a rights issue, while Heineken will fund its portion from debt.
The bidding consortium faces a Jan. 21 deadline stipulated by the UK Takeover Panel to make a formal bid or walk away, and analysts say it will be difficult for Carlsberg to walk away as it would risk losing its key growth asset of Baltika brewer BBH.
As part of its defense, S&N is trying to turn the tables and gain control of BBH from Carlsberg. The British brewer has lodged a legal claim that the consortium's bid breaches its BBH agreement with the Copenhagen-based brewer and S&N should be allowed to buy Carlsberg out of the venture.
The result of this arbitration case is due by July 3.
Carlsberg has offered to give further data on BBH to allow S&N's shareholders to assess its true worth, but S&N says this does not meet its demands for the release of a three-year business plan covering growth trends and capital expenditure.