Foster's Group has sent a letter to Southcorp shareholders as its takeover bid gathers momentum. The drinks company pointed out to shareholders today (1 March) that there are no rival bidders and questioned whether Southcorp's recovery plan can be delivered.

In the letter, Foster's cited a number of opinions from newspaper columnists and analysts, while reiterating that its offer price - currently A$4.14 per share - is substantially more than the value of the wine company's shares.

"Southcorp's recovery story only supports an average broker valuation of A$3.30 per share and is yet to be proven," Foster's chairman Frank Swan said in the letter. "There are no other bidders and there is significant risk that Southcorp's share price will fall substantially if Foster's offer lapses."

Swan also attacked Southcorp's decision to pay an unfranked, before tax, dividend, saying that the payment is likely to result in an inefficient tax outcome for most shareholders.

Late last month, Foster's reduced its offer for the wine company from A$4.17 a share following Southcorp's payment of a 3 cents a share dividend to shareholders.

The bid is scheduled to close on 17 March.