ST. LOUIS — The battle for America's iconic beer turned nasty yesterday, with brewer InBev escalating its offer for Anheuser-Busch into a hostile bid while the maker of Bud accused the Belgian company of undervaluing its worth.

InBev announced it will attempt to remove Anheuser-Busch entire board of directors and the St. Louis-based company responded by calling the move an attempt to use a "hand-picked board" to buy the nation's biggest brewery at a discount.

"Anheuser-Busch shareholders should ask themselves whether the directors selected by InBev would negotiate the best transaction for Anheuser-Busch shareholders," the company said in a statement.

Anheuser-Busch's directors rejected InBev's $65 a share price two weeks ago as inadequate, but said the company would consider a higher price.

InBev SA, the maker of Stella Artois and Beck's, wants Anheuser-Busch to respond to its proposal on the board within 10 days. InBev said it was taking action because Anheuser-Busch has refused to talk about its offer.

In an aggressive move to bypass Anheuser-Busch's board, InBev filed paperwork with U.S. regulators yesterday, asking Anheuser-Busch's shareholders to submit a motion to the company that would fire its board members and replace them with an alternate slate.

The brewer proposed an alternate board, including Adolphus Busch IV, the uncle of Anheuser-Busch CEO August Busch IV, that would give shareholders "a direct voice" in the takeover, InBev said.

If a majority of shareholders go along with InBev's $46 billion bid for Anheuser-Busch, they could remove the board and approve the Belgian brewer's offer for the company, which makes popular brands like Budweiser and Bud Light.

While the rhetoric between the two companies grows more hostile by the week, their statements yesterday indicated there might be room for a negotiated purchase.

Carlos Brito, InBev's chief executive, said he strongly prefers to negotiate with Anheuser-Busch. He said InBev's $65 a share offer is well above the company's $50 per-share price before the stock's value was inflated by market speculation about InBev's offer.

While insisting the previous offer was too low, Anheuser-Busch's statement yesterday said it "would be open to consider any proposal that would provide full and certain value to Anheuser-Busch shareholders."

Anheuser-Busch shares rose 7 cents to close at $61.74 yesterday, although it had risen as high as $62.35 during the day. InBev shares rose less than 1 percent to 41.73 euros ($65.40).

Anheuser-Busch Cos. Inc.'s board has laid out its own plan for earnings growth that would cut costs and increase prices to boost the stock's value over the next few years.

Brito again criticized the plan, saying it had "significant execution risks" because it failed to tackle the problems Anheuser-Busch will face as prices soar for transportation and key ingredients.

It's unclear how institutional shareholders will react to InBev's offer. However, it seems likely most would chose to accept $65 in cash immediately instead of waiting years for Anheuser-Busch's plan to boost value, said Bill Finnie, adjunct professor of strategy at Washington University's Olin School of Business in St. Louis.

But that doesn't mean InBev's hostile bid is a sure thing, said Finnie, who retired from Anheuser-Busch as director of strategic studies and planning in 1991. A hostile takeover could create ill will among consumers and Anheuser-Busch employees, making it difficult for InBev to integrate the two companies and boost sales with U.S. customers, he said.

"It still makes a whole lot of sense for InBev management to sit down with some combination of Anheuser-Busch management and directors and do a deal that is a win-win for both companies." Finnie said.

Anheuser-Busch might be open to a price of $70 a share, and an agreement that InBev would move its global headquarters to St. Louis, Finnie said.

In addition to Adolphus Busch IV, the alternate board would include former Guidant CEO Ronald Dollens; former Nabisco CFO James Healey; ex-Pillsbury CEO John Lilly; ex-Glaxo CEO Ernest Mario; and former Lockheed Martin chief counsel William Vinson.

"They are committed to acting in the best interests of Anheuser-Busch shareholders and will take an independent view on the proposed combination," InBev said.

The combined company would be the world's largest brewer by far. Based in Belgium, InBev now generates most of its profits outside of the stagnant beer-drinking markets of North America and Europe, focusing instead on emerging economies in Latin America, Asia, eastern Europe and Russia.

But the company's aggressive cost-cutting has unsettled some in the United States.

Several politicians have come out against the deal, saying it may create a near-monopoly in the U.S. beer market and damage the economy in the company's home state of Missouri by shedding some of the 6,000 workers the company employs in St. Louis.

InBev has promised not to shut any U.S. breweries and to keep the company's North American headquarters in St. Louis.