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Treasury Ends Acquisition Discussions After Shareholder Feedback

September 29, 2014

The board of Treasury Wine Estates says it has ended discussions toward a possible acquisition of the business, owing to feedback from shareholders asserting that the matching A$5.20 bids lodged by KKR and TPG Capital this summer undervalued the company. The shareholders consulted hold approximately 50% of the company’s shares.

The board said that instead it would seek to increase and accelerate consumer marketing, cut costs and put a greater focus on its core brands. “Throughout the due diligence process the private equity bidders indicated support for Management’s strategic plans and roadmap.They also did not identify any major concerns with the business. However, it is now apparent to the Company that the bidders are not able to support a transaction on terms and at a price acceptable to the Board,” Treasury’s statement read.

KKR made an initial play for TWE six months ago, offering $A4.70 ($4.13) a share, but that offer was rejected by Treasury’s board. Then, this summer, both it and Texas-based firm TPG capital offered matching A$5.20 bids. Last month, TWE reported an after-tax loss of A$100.9 million ($88.6m) for its recently completed fiscal year, as its global volume fell 6.4% to 30 million cases.

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