Australia’s Treasury Wine Estates, the world’s second biggest winemaker, has rejected a $2.9 billion takeover bid by U.S.- based private equity giant Kohlberg Kravis Roberts & Co. LP as being too low. The rejection drove Treasury’s share price up 18% or 2% above the bid value as investors rushed to buy ahead of any further takeover bids. An ongoing restructuring on the part of Treasury Estates, its Penfolds label value, and Asia’s growing demand for wine has gone far toward turning around Treasury’s prospects after the company saw profits fall 38% in 2013 in the six months to February. Treasury’s recent slump in a reflection of the Australian wine industry as a whole which has been dealing with a high currency and a volatile market. In the five years to 2013/14 Australian wine sales declined 1.9% annually but are forecast to stabilize by 2019 as a result of growing sales to Asia according to IBISWorld. Treasury posted sales of A$1.7 billion in the 2013 financial year and has also stated that it is forecasting a boost in sales for the second half of 2014 after its upcoming Penfolds release.
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