Kohlberg Kravis Roberts & Co.
) and Rhone Group LLC have raised the takeover bid for
Australia-based global wine-making and distribution company
Treasury Wines Estate, by nearly 11% to $3.2 billion. The new offer
surely stands a chance to be reconsidered by the vintner, which had
rejected the earlier offer on the pretext of it being too low.
The U.S. private-equity firms jointly offered A$5.20 for each of
Treasury Wines' share, up from the previously rejected figure of
A$4.70 per share offered by Kohlberg Kravis in April. However, this
time, with this more reasonable offer, the winemaker, which is
struggling with waning sales in China and oversupply in U.S as well
as fierce competition in its own backyard, may find the offer more
In fact, Treasury Wines' ordeals can be traced back to July last
year, following the A$155-million write-down of U.S. business and a
sales decline in China. More recently, a high currency rate along
with a lull in the Australian wine industry, have added to its
woes. These challenges have compelled the owner of Penfolds,
Beringer and Wolfblass brands toward a restructuring drive, so as
to improve its performance.
At this crucial juncture, Treasury Wines will surely assess the new
offer more seriously to find turnaround secrets.
Kohlberg Kravis, on the other hand, is always on the lookout for
companies with solid growth potential. Given the long-term growth
prospect of the Australian wine industry, Treasury Wines seems a
lucrative opportunity for Kohlberg Kravis.
Currently, Kohlberg Kravis carries a Zacks Rank #4 (Sell). Some
better-ranked investment managers include Cohen & Steers Inc. (
), SEI Investments Co. (
), and Affiliated Managers Group Inc. (
). While Cohen & Steers and SEI Investments sport a Zacks Rank
#1 (Strong Buy), Affiliated Managers carries a Zacks Rank #2
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
KKR & CO LP (KKR): Free Stock Analysis
AFFIL MANAGERS (AMG): Free Stock Analysis
COHEN&STRS INC (CNS): Free Stock Analysis
SEI INVESTMENTS (SEIC): Free Stock Analysis
To read this article on Zacks.com click here.