June 11 (Bloomberg) -- Foster's Group Ltd., Australia's biggest beer and winemaker, may get takeover approaches as it conducts a review of its global wine business, analysts including David Errington of Merrill Lynch & Co said.

Chairman David Crawford will oversee the review, which he said yesterday will consider ``all alternatives'' for the world's second-largest winemaker, with assets in the U.S., Australia and Europe. Foster's rose 2 percent, valuing the Melbourne-based company at A$10.7 billion ($10 billion).

``The board of Foster's has put the company in play,'' Errington said in a report to clients today. ``The board will, in our opinion, entertain any bid for any asset or indeed any bid for the entire company.''

Chief Executive Officer Trevor O'Hoy quit this week as the company cut earnings growth forecasts and flagged writedowns of as much as A$770 million for unsold wine and sluggish U.S. sales. SABMiller Plc and joint venture partner Coca-Cola Amatil Ltd., InBev NV, Anheuser-Busch Cos. and Heineken NV are among those who may be interested in Foster's, JPMorgan Chase & Co. said.

Foster's rose 11 cents to close at A$5.56 in Sydney trading, paring this year's decline to 15 percent. Errington rates Foster's ``underperform,'' a recommendation he has held since the company purchased Southcorp Ltd. in January 2005.

Amy McDonald, a spokeswoman for Foster's, declined to comment on the analysts' reports today.

Wine Expansion

Foster's began its wine expansion in 1996 as it sought to limit the impact of stalling beer sales by paying A$482 million for Mildara Blass Ltd. In 2000, it moved into California with the A$2 billion purchase of Beringer Wine Estates Holdings Inc.

O'Hoy bid A$3.2 billion for Southcorp, betting that a combination of the maker of Lindemans, Rosemount and Penfolds with Foster's assets would give him global leadership in bottled wine. That price was ``too much,'' Crawford said yesterday.

Foster's is conducting an international search for O'Hoy's replacement and declined to say how long it will take.

Lindy Newton, an analyst at UBS AG, said an international brewing executive may be needed such as Tony Froggatt, a former CEO of Scottish & Newcastle Plc with Australian citizenship who lives in Sydney.

Other potential candidates include John Dunsmore, who succeeded Froggatt, former Molson Coors Brewing Co. executive Dan O'Neill and Tom Long, who heads the U.S. brewing unit of SABMiller Plc, said Newton, who today cut her rating on Foster's to ``neutral'' from ``buy.''

Beer, Wine Split

JPMorgan analyst Stuart Jackson, who rates Foster's ``neutral,'' said O'Hoy's departure raises the chances Foster's will split its wine and beer assets into separate companies.

``That would liberate significant shareholder value in our opinion by allowing a bidding process for the high-value beer operations,'' Jackson said in a report. ``It would also result in a more focused approach to the wine market, which has been sadly lacking.''

Splitting the assets would also eliminate the need to invest in wine, an issue that may have deterred previous bidders.

``A de-merger by Foster's would remove this issue, and start a competitive bidding process,'' he wrote.

Andrew Kovacs, an analyst at Macquarie Group Ltd., said a takeover of the whole company is ``unlikely in the short term,'' because of the problems in the wine business.

``Beer, on the other hand, we believe could be attractive to a number of global industry incumbents,'' Kovacs, who rates the stock ``underperform,'' said in a report.

To contact the reporter on this story: Robert Fenner in Melbourne rfenner@bloomberg.net

Last Updated: June 11, 2008 02:58 EDT