KKR

Australia-based wine producer Treasury Wine Estates has rejected $2.9bn purchase bid from American private equity investment firm Kohlberg Kravis Roberts (KKR).

KKR has announced its intention to purchase Treasury Wine Estates in April 2014, for $4.70 cash per share.

Treasury Wine has rejected the buyout proposal after reviewing it along with its advisors and said it did not meet the company’s renewed plans.

According to Treasury Wine, the proposal also does not reflect the fundamental value of the company.

KKR requested Treasury Wine to keep the proposal confidential.

The Board of TWE decided that it was important to preserve the confidentiality of the proposal and that premature disclosure would be contrary to the interests of the company’s shareholders, in order to have meaningful discussions with KKR.

The company’s plans include improving brand prioritisation and investment, addressing structural challenges facing the business and reducing overhead costs.

Treasury Wine claims that the renewed plans are key to the company’s short term performance and strategy to deliver long-term sustainable growth and are expected to drive its potential asset impairments.

Treasury Wine Estates is engaged in the viticulture and winemaking, marketing, sale, and distribution of wine in Australia, New Zealand, Europe, the Middle East, Africa, the Americas, and Asia.

The company offers its products under various brands including Beringer Vineyards, Lindeman’s, Penfolds, Rosemount Estate, Wolf Blass, Annie’s Lane, Castello di Gabbiano, Chateau St. Jean, Coldstream Hills, Devil’s Lair, Etude Wines, Greg Norman Estates, Heemskerk, Matua, Pepperjack, Seppelt Wines, Stags’ Leap Winery, Wynns Coonawarra Estate, and Yellowglen.

Image: KKR’s headquarters in the Solow Building in New York City. Photo: Courtesy of Ilya Voytov.