Share price of
Kohlberg Kravis Roberts & Co.
) declined 1.8% after Treasury Wines Estate, the Australia-based
global winemaking and distribution company turned down its takeover
bid recently. The bidding price of A$3.1 billion ($2.9 billion) by
the U.S.-based private equity firm failed to meet the expectations
of this Australian winemaker.
However, following this news, ADRs of Treasury Wines gained nearly
14.7%. The bullish stance of the investors was based on the
expectation that Kohlberg Kravis might raise its offer.
The private equity firm had bid for the takeover on Apr 16.
However, Treasury Wine's advisor
The Goldman Sachs Group, Inc.
) recommended the company to disclose the details of the bidding
only recently after discovering that Kohlberg Kravis' advisor
Nomura Holdings, Inc.
) had contacted some of its shareholder with regard to the
Treasury Wines has been facing tough times following the write-down
of its U.S. business as well as decline in sales in China. However,
with the overall improvement in the Australian wine market, we
believe that the scenario will somewhat change. As per market
research firm IBISWorld, the Australian wine industry is expected
to stabilize by 2019 driven by improvement in sales in Asia.
Kohlberg Kravis, known for its efficient inorganic growth
strategies, is always on a lookout for companies that are facing
trouble now but has solid growth potential. Given the long-term
growth prospect of the wine industry in Australia, Treasury Wines
seems to be a lucrative opportunity for Kohlberg Kravis. So the
company might increase its bid.
Some of the latest deals of Kohlberg Kravis reflect its impressive
investment story driven by meaningful acquisitions. The company is
not only intent on expanding globally, but also aims to expand its
portfolio across diverse sectors.
Moreover, as per a
report, Kohlberg Kravis is close to inking a deal to acquire
Goodpack Ltd., a Singapore-based company that provides packaging
alternative for bulk cargo. The acquisition, if it materializes,
would be one of the largest investments by Kohlberg Kravis in the
Asia Pacific region lately.
Kohlberg Kravis currently carries a Zacks Rank #2 (Buy). Other
investment manager worth considering includes
Affiliated Managers Group Inc.
) with a Zacks Rank #1 (Strong Buy).
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