Now the suffering shareholders in Treasury Wine Estates (TWE) (those courageous enough to have hung on through the past two years of bad news) are in a sweet spot – a rival bid emerged yesterday to that from US private equity groups, KKR and Rhone Capital.
It’s shades of the 2007 battle for control of Coles Myer when several private equity funds and then Wesfarmers battled for control of the retailer and its Myer department store chain, which was sold off and then later refloated by TPG, who is said to be the second possible bidder.
Treasury told the ASX first thing yesterday morning that it had received a second takeover offer from a global private equity firm, just weeks after the KKR/Rhone bid was launched at $5.20 a share.
That values Treasury at around $3.4 billion.
The second bid which requested its identity remain confidential for “a period of time”, has pitched its bid at $5.20 and wants to do the deal via a scheme of arrangement.
Media reports quickly identified the new bidder as US private equity group, TPG.
The shares edged up in early trading, and then rose more than 3% to close to at $5.33 as traders (hedge funds mostly) bet on KKR/Rhone coming back with a higher offer, and perhaps TPG replying.
TWE 1Y – Bidding war looms for Treasury
Media reports later claimed that a third US private equity group Carlyle Group is also looking at the company but is not involved in the current approach.
Treasury told the ASX that it has decided it is in the best interests of shareholders to “engage further with this private (second) equity investor’’.
It will negotiate a confidentiality agreement with the new private equity investor and allow them to also come in and conduct due diligence on the company, as KKR/Rhone are doing.
And to think KKR alone offered $4.70 a share for Treasury back in April.
