S&N's famous brands include Newcastle Brown Ale

The two firms proposed an offer of 750 pence per share for S&N, up from their initial proposal of 720p per share.

But Edinburgh-based S&N, whose brands include Foster's and Newcastle Brown Ale, accused the two of trying to buy the business "on the cheap".

S&N said it had "no hesitation" in rejecting the offer, which it described as "wholly inadequate".

'Attractive opportunity'

The consortium of Denmark's Carlsberg and Dutch brewer Heineken said that their new offer valued S&N at an equity value of �7.3bn and an enterprise value of approximately �9.7bn.

The consortium's proposal significantly undervalues S&N's brands and market positions John Dunsmore, Scottish & Newcastle chief executive See S&N's share price

"The increased proposal represents a very attractive opportunity for S&N shareholders to obtain a price which is materially higher than the standalone value of the group," said Heineken chairman and chief executive Jean-Francois van Boxmeer.

S&N's rejection of the new proposal was swift and blunt.

"Carlsberg and Heineken's marginally increased proposal continues their attempt to get S&N's unique portfolio of businesses on the cheap," said S&N chairman Sir Brian Stewart.

Key asset

If Carlsberg and Heineken are successful in buying S&N, their plan is to split the company up.

Heineken would take control of S&N's main business in the UK and some other European markets, while Carlsberg would take over the operations in France and Greece.

Carlsberg would also gain full control of Russia-based brewer Baltic Beverages Holdings (BBH), which is currently jointly owned by it and S&N.

BBH is seen as one of S&N's key assets, as it controls more than 85% of Baltika, Russia's biggest brewer.

S&N said last month that Carlsberg had breached the terms of the joint agreement for BBH by making the takeover approach, adding that it was considering whether to take full control of the venture.

And in rejecting the latest offer, S&N said it was concerned that Carlsberg was denying shareholders the chance to discover BBH's true worth.

"The consortium's proposal significantly undervalues S&N's brands and market positions," said S&N chief executive John Dunsmore.