Is Treasury Wine Estates set to lose its publicly-limited status?

Is Treasury Wine Estates set to lose its publicly-limited status?

Treasury Wine Estates has been the subject of takeover speculation and a brace of proposals in 2014. Here, just-drinks provides a digest of the most significant events so far.

September 2014: Right at the end of the month, TWE surprised everybody by walking away from its pair of suitors, claiming that the two offers “undervalued the company”. CEO Clarke said the end of discussions also signalled the end of any takeover prospects.

But, how much of the decision was TWE's? And, how will the company fare going forward?

August 2014: Kohlberg Kravis Roberts & Co returned to the table with a partner, Rhone Capital, to propose an increased AUD5.20-per-share offer for TWE. The Australian company agreed to open its data room to the two private equity firms.

Was the writing on the wall for Treasury?

Within a week, a competing offer – for the same price – was lodged by an unnamed private equity firm. Many industry observers suggested at the time that Treasury's fate was sealed.

A week later, TWE released fiscal full-year results that saw profits turned to losses, AUD100.9m-worth of losses, on a 5.3% fall in sales.

The results prompted editor Olly Wehring to suggest that the two competing offers for TWE had hit their peak already.

CEO Clarke came out fighting, however, suggesting at the time that TWE may be on the hunt for acquisitions of its own.

June 2014: An impairment charge of AUD260m was flagged for fiscal 2014, as TWE implemented its programme for growth. At the same time, the company warned that fiscal 2015 would be a “reset year”.

The changes would occur irrespective of ownership, CEO Clarke said.

May 2014: The rumour-mill cranked into action in May, with reports linking Pernod Ricard to a move for TWE's US wine assets. The likelihood of such a transaction always seemed slim, according to just-drinks editor, Olly Wehring,

And yet, further speculation arose two weeks later, with TWE moving to deny claims that it had held talks with Constellation Brands over a similar move.

Later in the month, things got real with the news that Constellation had received – and rejected – a takeover offer from private equity firm Kohlberg Kravis Roberts & Co. The AUD4.70-per-share offer, which valued TWE at around US$2.85bn, did “not reflect the fundamental value of the company”.

TWE unveiled its roadmap for a return to growth in May, with a targeted saving of AUD35m in fiscal 2015. Had the company found its roadmap in time to preserve its existing ownership structure?

February 2014: TWE welcomed a new CEO, with former Coca-Cola Co, Kraft Foods and Premier Foods executive Michael Clarke taking the hotseat. For an exclusive just-drinks comment on the appointment of Clarke, click here.

On the same day, the company posted half-year results that were propped up by a one-off tax benefit.

January 2014: After being granted a trading halt on its shares in Australia, TWE warned that it expected its EBITS (earnings before interest, tax and SGARA and material items) in the six months to the end of December to be down by 20% year-on-year. The announcement prompted a share price tumble.

September 2013: CEO David Dearie left the company with immediate effect, to be replaced on an interim basis by non-executive board member Warwick Every-Burns. For an exclusive just-drinks comment on Dearie's departure, click here.

August 2013: In full-year results for the 12 months to the end of June 2013, net profits plunged by 53% to AUD42.3m, despite a 2.9% lift in sales. CEO David Dearie conceded that the writedown had hit the company hard.

July 2013: Alarm bells began ringing at TWE's HQ as far back as last July, when it announced plans to destroy its old and out-of-date stock in the US. The move was estimated at the time as hitting the company's bottom line to the tune of AUD160m (US$145.7m).