In a statement issued to the ASX yesterday, Treasury Wine Estates (TWE) has announced that it has rejected a preliminary bid for to acquire all shares in TWE at a price of $4.70 cash per share from private equity firm, Kohlberg Kravis Roberts & Co. (KKR).
The $4.70 figure would have valued the business at $3.05bn, however TWE stated that the preliminary share bid did not reflect the “fundamental value” of the company and as such would not be in the best interests of shareholders.
In the statement to the ASX, TWE said that KKR has initially requested that the proposal, which was received on 16 April, be kept confidential as premature disclosure would not be within the interest of TWE shareholders given the highly conditional nature of the bid.
However, TWE learnt that KKR had spoken with at least one of TWE’s sharesholders, placing the confidentiality of the agreement at risk. The Board then decided to announce the rejected bid in order to ensure that there is an informed market for the company’s shares.
The company said that since TWE’s new chief executive officer, Michael Clarke came onboard on 31 March, he has been progressing with plans to improve the company's overall performance, as well as addressing the structural challenges and overhead costs.
"While these plans may drive potential asset impairments, they are fundamental to a turnaround in TWE's short term performance and the company's ambitions to deliver long-term sustainable growth,” the statement reads.
"The board has considered the KKR proposal in the context of these renewed plans and concluded that the proposal does not reflect the fundamental value of the company and it is therefore not in the best interests of shareholders."
TWE said that it does not intend to take any further action in relation to the proposal.
According to SMH, TWE’s shares were last traded at $4.07, rising from $3.84 at the start of May.