Offers pouring in for winemaker Treasury
Tuesday 12 August 2014
The world’s biggest listed winemaker is at the centre of a bidding war as a second private equity suitor has approached the firm.
Treasury Wines, which owns around 80 brands including Penfolds, Wolf Blass and Lindemans, has received a $3.1bn (£1.9bn) bid from TPG Capital Management – the same amount offered by rival bidders KKR and Rhone in a joint bid earlier this month.
Both bidders have been given access to the Australian winemaker’s books to start due diligence, although some shareholders seem to think a third, increased bid could be on the cards, as shares closed at A$5.33 – 2.5 per cent above the A$5.20 offer.
KKR had made an initial approach to Treasury in April with a A$4.70 a share offer, but this was swiftly rejected by the board.
Despite struggling in the past year, chief executive Michael Clarke, who joined in March, previously said plans were afoot to turn around the firm’s fortunes without it being sold off.
However, yesterday the company said: “The board of TWE has concluded it is in the interests of its shareholders to engage further with this private equity investor.”
TPG has owned Treasury before, having sold it to Fosters in 2000. The brewer then spun it out in 2011 after a A$1bn write-down following a glut of Australian grapes and weak sales in the US.
Since then Treasury has continued to struggle, especially in the US due to a strong Australian dollar and premium wine not in such high demand compared with Asia.
It also faced problems in China as the government there pushed an austerity drive to cut back on extravagant gifts between businessmen and politicians. However, bosses have said an increase in Japan could help offset the falls in China.
Last year Treasury had to write down A$160m, due in part to unsold stock, as bosses had to pour away six million bottles of out-of-date wine in the US, while this year management have revealed a write-down of A$260m after overpaying for assets.
It has since led to a major overhaul, with the chief executive, chief finance officer and heads of its Asian and Australian businesses being shown the door.
New boss Mr Clarke has instigated a new business model that will see 175 job cuts. He is no stranger to turnarounds, having spent 18 months at the Mr Kipling to Bisto owner, Premier Foods, before unexpectedly quitting to look for a bigger job.
Private equity group KKR is particularly keen to snap up the business, due to the A$6bn new Asia-Pacific fund it set up last year, while TPG is hoping for a successful deal as it continues to recover from bets that failed during the 2008 financial crisis.
- 1 The West has it totally wrong on Lee Kuan Yew
- 2 Watch: Man takes selfie every mile of 2,600 mile hike, creates amazing timelapse video
- 3 The day I starred in Only Fools and Horses
- 4 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 5 Scientists have discovered a simple way to cook rice that dramatically cuts the calories
Germanwings captain Patrick Sondenheimer tried to break into locked cockpit door 'with an axe' as plane was descending
Saudi Arabia says it won't rule out building nuclear weapons
The battle for the Middle East's future begins in Yemen as Saudi Arabia jumps into the abyss
Jeremy Clarkson 'could be given minder' ahead of a potential Top Gear return
#FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Revealed: Putin's army of pro-Kremlin bloggers
Germanwings plane crash: Co-pilot Andreas Lubitz wanted to 'do something people would remember him for'
Andreas Lubitz: Knee-jerk reaction to 9/11 enabled mass murder
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...