Australia\'s Treasury wines rejects $2.85bn takeover offer

Australia's Treasury Wine Estates on Tuesday revealed it received a Aus$3.05 billion (US$2.85 billion) takeover bid from US private equity firm Kohlberg Kravis Roberts (KKR) and rejected it as too low. The firm, which has assets on three continents with more than 80 brands, said it received the "preliminary, indicative" offer on April 16 but kept it confidential so it could hold discussions with KKR. It said the company considered the proposal in the context of its plans under new chief executive Michael Clarke to improve performance by focusing on its premium brands while reducing overheads. "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," it said. KKR offered Aus$4.70 for each Treasury Wine share, representing a 15 percent premium to the closing price on Monday. The share price spiked nearly 20 percent to Aus$4.86 after the offer was announced Tuesday. "The board of TWE does not intend to take any further action in relation to the proposal," Treasury Wines added. The firm, which has more than 11,000 hectares (27,000 acres) of vineyards, sales of 32 million cases of wine annually and employs 3,500 people, was last week forced to deny it had received an offer for its US wineries from drinks giant Pernod Ricard. It followed the Pernod chief executive Jean-Christophe Coutures suggesting in a media interview that the company was interested in buying some of the assets.