Treasury Wine Estates revealed in May that KKR had made an initial proposal

Treasury Wine Estates revealed in May that KKR had made an initial proposal

Treasury Wines Estates (TWE) is to open up its books after receiving an increased AUD3.4bn (US$3.2bn) takeover proposal from two private-equity suitors.

The Australia-based wine maker said today Kohlberg Kravis Roberts & Co (KKR) and Rhone Capital are willing to buy all of its stock for AUD5.20 per share, on condition of "non-exclusive" due diligence. The proposal is AUD0.50 more than an initial KKR proposal revealed earlier this year, and an AUD0.23 improvement on TWE's share price as of Friday's close.

In a statement, TWE said there is “no certainty” that the proposal will result in an offer for the company, however “it is in the interests of its shareholders to engage further with KKR and Rhône”.

The proposal remains subject to several conditions, including:

  • Completion of due diligence to KKR’s and Rhone’s satisfaction
  • Final approval of KKR’s and Rhone’s investment committees
  • Availability of financing
  • Unanimous recommendation by the board of TWE

In May, TWE said it had rejected a takeover offer from KKR, saying the “proposal does not reflect the fundamental value of the company”. It was TWE's third M&A-related statement to the Australian Stock Exchange that month following reports linking Pernod Ricard to its US wine assets and also speculation of a similar move by Constellation Brands.

TWE is currently being restructured by its CEO Michael Clarke after enduring a troubled time of late, including a US$145m write-down in the US last year.

At close of trading today, TWE's share price had climbed by 4% to AUD5.15.

To read TWE's official statement, click here.