After Australia’s Treasury Wine Estates rejected Kohlberg Kravis Roberts & Co.’s (KKR) $2.85 billion offer in April, and $3.05 billion offer in May, KKR has increased its takeover bid by 10.6% to $3.15 billion prompting Treasury Wine Estates to open their books to the private equity firm for due diligence. Treasury Wine Estates suffered a terrible year in 2013 seeing profits fall by 38% in the six months to February, however the company is conducting ongoing restructuring, and given Asia’s growing market for wine and Treasury Wine’s valuable Penfold’s label, prospects for the winery are being viewed more positively. Treasury has tried to hold off a takeover by hiring Michael Clarke as its new CEO in April and by cutting costs through an efficiency drive that is expected to save A$35 million in fiscal year 2015. This bid however, is being said to be a starting point for any rival companies that have an interest in acquiring the world’s number two winemaker and wish to see the company’s books.
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