August 22, 2014 Leave a comment
TPG Capital Management and Kohlberg Kravis Roberts (KKR) must really love wine – both private equity firms have made significant bids on Australia’s Treasury Wine Estates.
Treasury Wine Estates, which owns popular wines such as Penfolds and Rothbury Estate, announced on Monday that it had received a bid from TPG Capital, competing with KKR’s $3.2 billion buyout offer. TPG Capital’s bid only matched KKR’s offer of 5.20 Australian dollars ($4.82 a share), so a possible bidding war could be about to ensue! Investors are predicting that one or more of the companies will raise their current bids.
At 10:00pm EDT on Sunday, Treasury Wine Estates was valued at $3.4 billion. Investors were bidding the stock up 2.4 percent, anticipating that the battle will continue.
KKR is a private equity company based out of New York, and was co-founded by Henry R. Kravis and George R. Roberts, who still are active in the company. The company offered $2.8 ($4.70 per share) billion for Treasury Wine in April but was rejected. TPG Capital is based out of Fort Worth, Texas, and was founded by James Coutler, William S. Price III, and David Bonderman. Each firm is a strong contender in the impending bidding war for Treasury Wine.
Maybe these competing companies are gearing up for the holiday season and hoping for some free samples? More likely than that, both companies see a great investment opportunity. Treasury Wine also owns Lindeman’s, Rosemount Estate, and Wolf Blass labels, among over 80 other wine brands. Michael Clarke, a former senior executive at Kraft Foods and Coca-Cola was recently hired as the company’s chief executive. Clarke is hoping to resolve this matter quickly so it isn’t a distraction, a spokesman said.
Who do you think will get this investment?