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TWE ceases takeover negotiations

In an announcement to the ASX this morning, Treasury Wine Estates has confirmed that it will no longer be engaging in takeover discussions with Kohlberg Kravis Roberts &Co. L.P and Rhone Capital L.L.C.

In August this year, TWE received an unsolicited, indicative, non-binding and conditional proposal to acquire all of the shares of TWE at a price of $5.20 cash per share from Kohlberg Kravis Roberts &Co. L.P and Rhone Capital L.L.C. Roughly a week later, TWE received another takeover offer from an undisclosed global private equity investor to purchase all of the shares of TWE also at a price of $5.20 by way of scheme of arrangement.

Following a month of conversations with shareholders, TWE’s board and management have concluded that the price of $5.20 per share undervalued the company.

“The Board’s focus continues to be to act in the best interests of all shareholders,” said TWE’s Chairman, Paul Rayner.

“Following the receipt of the initial, indicative proposals from the two parties, we believed it was in shareholders’ best interests to grant those parties the opportunity to conduct non-exclusive due diligence. That process has now concluded and the Board is confident in the strategic plans to grow the company and is looking forward to working with management to deliver value to its shareholders.”

As part of its strategic growth plans, TWE announced that it will be expanding into the $US39 billion global travel retail market by securing shelf space at some of the world’s top airports, cruise liners and duty free shops. The company also announced job cuts back in May as part of efforts to reduce costs by $35 million in 2014-15.

 

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