Treasury Wine Estates snubs $3bn takeover bid

news  %tages Treasury Wine Estates snubs $3bn takeover bid
Penfolds owner Treasury Wine Estates has rejected a takoever offer from a private equity group that valued its wine business at around A$3bn (US$2.78bn).

Private equity group Kohl Kravis Roberts (KKR) has offered to buy Treasury for A$4.7 per share. But, the news sent Treasury's share fee up by 18% on the Australian stock exchange today (20 May), to close the day ahead of the bid at A$4.8 per share.It is the third time in a month that Treasury has to deal with market speculation about a possible sale, but this is the first time that it is known to have received a formal approach from a potential suitor.KKR had requested confidentiality, but the Wolf Blass wine producer said it chose to go public over the bid after it exposed that the private equity firm had been canvassing for support amongst Treasury shareholders.'The board has considered the KKR proposal in the context of these renewed plans and concluded that the proposal does not reflect the essential value of the companionship and it is therefore not in the best interests of shareholder,' Treasury said.There have long been rumours that Treasury could look to sell all or part of its wine business. Speculation has intensified recently after the winemaker's new chief executive, Michael Clarke, told analysts that he thinks the companionship has too many brands. Treasury also had to accept tens of millions of dollars in charges in the US last year, in order to ruin an inundate of wine that it was powerless to sell there. Recent weeks have seen reports of interest in the US business from Jacob's Creek owner Pernod Ricard and Robert Mondavi owner Constellation Brands. But, Treasury has denied any approach and said last week that it intends to keep its US business.

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