Australia's Biggest Wine Company, Penfolds Owner Treasury, Rejects $3.4 Billion Takeover Bid

Treasury Wine Estate is staying in local hands for now.

Treasury Wine Estates, the owners some of Australia’s leading wine brands, including Penfolds, Wolf Blass, Lindemans, Wynns and Rosemount, as well as French and American wineries, has rejected takeover bids worth more than $3 billion from rival private equity firms.

While the AFR reported early this morning that the Treasury board looked set to approach a $5.20 a share, $3.4 billion bid from US private equity firm Kohlberg Kravis Roberts, the company responded soon after saying that it had terminated discussions with both KKR and rival suitor TPG Capital.

Treasury said that over the past month it held discussions with shareholders holding around 50% of the company and “almost every one” held the view that at $5.20 a share, the company was undervalued.

Treasury went on in its statement to the ASX saying:

Throughout the due diligence process the private equity bidders indicated support for Management’s strategic plans and roadmap. They also did not identify any major concerns with the business. However, it is now apparent to the Company that the bidders are not able to support a transaction on terms and at a price acceptable to the Board.

Accordingly all discussions have now ceased.

It seems not all shareholders were happy with that news though, with investors marking the company down. Shares were trading down nearly 15% to $4.19.

Treasury Wine Estates CEO Mike Clarke, who took the helm of the under-performing wine business in March, told a teleconference this morning that he was indifferent about whether the company was publicly or privately owned, adding that he thinks that’s the end of the bids.

“I think it’s over, is my point of view,” he said.

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