Treasury has been viewed as ripe for a takeover since late 2013. Australian M&A deal volume jumped to $81.1 billion so far this year, making it the biggest year for deal activity since 2011, according to Thomson Reuters data. The skirmish for Treasury comes as mergers and acquisitions activity in Australia booms, driven by takeovers by overseas players. “There’s been some pretty difficult periods for the business but if you look at where the earnings have come from there is clear value locked away there, which either the current team or private equity, through some level of a break-up, could crystallise,” said Thomas. A private equity purchase of Treasury up to A$5.80 a share, or A$3.77 billion, “stacks up”, Thomas said.
“It’s highly probable that a deal gets done now that there’s two of them,” CLSA analyst David Thomas said. While the pair could yet withdraw interest after due diligence, the prospect of competing bids by two of the world’s biggest private equity investors sent Treasury’s shares 4 per cent higher to close at a year high of A$5.33 – above the indicative offer from both parties and valuing the target at about $3.21 billion. The buyout firm behind the second proposal for a firm that expects massive writedowns from problems in US and China operations was TPG, a source with direct knowledge of the matter told Reuters.īy lodging an offer that matches KKR’s, TPG ensures it gets a first-hand look at the confidential financial details of the company that attracted its rival in the first place. LP for one of the world’s biggest wine makers.Ī week after KKR teamed with Rhone Capital LLC to propose a A$5.20 a share offer for Treasury, the owner of the Penfolds, Lindemans and Wolf Blass brands said yesterday it received a second identical approach from a global private equity firm.
That effectively ended its previous stance that its best option for the future was an efficiency drive under new chief executive officer Mike Clarke.Two global private equity giants are set to face off in a battle for Australia’s Treasury Wine Estates Ltd after TPG Capital Management LP matched a $3.1 billion move from KKR & Co. Treasury said last week it would allow KKR and Rhone access to its books for due diligence following their higher offer. Last week, KKR and Rhone offered the same amount for Melbourne-based Treasury, spun off from brewer Foster’s in 2011, after the target rejected an A$4.70 per share bid from KKR earlier this year. Goldman Sachs, which is advising Treasury, declined to comment. A Treasury spokesman told Reuters the second suitor made its approach over the weekend and asked not to be named. In a statement yesterday, Treasury said it will offer the second suitor time to undertake due diligence exercises to progress with its bid, which values the company at A$3.377bn ($3.13bn).
Treasury has been viewed as ripe for a takeover since late 2013 when it warned of massive writedowns, citing problems in US operations and sliding China sales. TPG has already started due diligence on Treasury after reaching a decision to make an approach over the weekend, the source added. Treasury declined to comment further on the second bidder’s identity. The buyout firm behind the second proposal was TPG, said the source, who had direct knowledge of the matter but could not be identified as the discussions were confidential. Private equity giant TPG Capital Management LP made a $3.1bn approach for Australia’s Treasury Wine Estates, a source said, setting the scene for a possible bid war for the world’s No.2 winemaker with rival KKR & Co.Ī week after KKR and Rhone Capital LLC proposed a A$5.20 a share offer for Treasury, the owner of the Penfolds, Lindemans and Wolf Blass brands said yesterday it received a second identical unsolicited approach from a global private equity firm which requested anonymity.Īt 0200 GMT, Treasury shares were trading at A$5.255, valuing the company at A$3.4bn, with investors bidding the stock up 2.4% on the prospect that a takeover battle might ensure.
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