Shares in Foster's Brewing Group, like Southcorp only a few weeks ago, have seen a surge in value of 7% after two days of heavy trading, prompting speculation two UK drinks companies are mounting a takeover bid.

Speculation in Australia has centred on a surprise joint bid between the wine and spirit giant Diageo and the UK's leading brewer Scottish & Newcastle (S&N). Reports have suggested that Diageo would take the wine division, Beringer Blass, while S&N would acquire the Foster's brewing division.

Foster's beer is already produced under licence by S&N in several European countries including the UK. But Foster's today said it was not aware of any reason for the unusual trading levels in its stock.

But a leading UK analyst told just drinks.com: "On paper it would seem the natural progression for S&N. It has been brewing Foster's on licence in the UK and Europe for years. S&N has taken the brand forward and any disruptions through the changeover would be nominal. Foster's is in good shape at the moment, having offloaded its loss-making Chinese operations."

"What I don't see is Diageo gaining much from the Beringer Blass acquisition. The brands are small compared to Southcorp which would be a better buy," he added.