A 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 on Monday it received a second identical
unsolicited approach from a global private equity firm which
At 10 p.m. EDT Sunday, Treasury shares were trading at A$5.255,
valuing the company at A$3.4 billion, with investors bidding the
stock up 2.4 percent on the prospect that a takeover battle might
The buyout firm behind the second proposal was TPG TPG.UL, said the
source, who had direct knowledge of the matter but could not be
identified as the discussions were confidential. Treasury declined
to comment further on the second bidder's identity.
TPG has already started due diligence on Treasury after reaching a
decision to make an approach over the weekend, the source added.
Treasury has been viewed as ripe for a takeover since late 2013 when
it warned of massive writedowns, citing problems in U.S. operations
and sliding China sales.
In a statement on Monday, 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$3.377 billion ($3.13
billion). A Treasury spokesman told Reuters the second suitor made
its approach over the weekend and asked not to be named.
Goldman Sachs GS.N, which is advising Treasury, declined to comment.
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 a A$4.70 per share bid from KKR earlier this year.
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Treasury said last week it would allow KKR and Rhone access to its
books for due diligence following their higher offer. That
effectively ended its previous stance that its best option for the
future was an efficiency drive under new chief executive officer
Investors in Sydney had previously speculated on whether leading
trade players, like China's Bright Food Group Co Ltd SHMNGA.UL,
France's Pernod Ricard PERP.PA and the world's biggest wine maker,
U.S.-based Constellation Brands Inc STZ.N, could be potential buyers
While the two proposals are identical, Treasury is allowing both
rivals to do due diligence simultaneously in the hope of speeding up
the process. CEO Clarke is keen to have the matter resolved quickly
so it isn't a distraction, the spokesman said.
The company is scheduled to release full-year results on Aug. 21
that are expected to highlight the impact of oversupply in its U.S.
operations and dwindling China sales because of a government
crackdown on luxury gifts, as well as early effects of Clarke's
efforts to turn the firm around.
(Reporting by Lincoln Feast and Byron Kaye in SYDNEY and Denny
Thomas and Stephen Aldred in HONG KONG; Editing by Kenneth Maxwell)
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