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Treasury CEO Cites Debt, Regulatory Issues As Barriers To Deal

September 29, 2014

Following Treasury Wine Estates’ announcement yesterday that it had ended takeover talks with KKR and another suitor thought to be TPG Capital, Treasury CEO Michael Clarke noted on a conference call that, in addition to shareholder dismay at the A$5.20 ($4.54) a share price on offer, debt and regulatory issues impeded an agreement between the parties.

Clarke said the potential deals being discussed would have resulted in higher levels of debt for TWE than were acceptable, and added that undisclosed regulatory concerns also discouraged an accord. Following the announcement, Treasury’s shares closed down 8.5% to A$4.50 ($3.93).

Looking ahead, Clarke said there would be “opportunities for inorganic changes within our organization,” flagging the possibility of bolt-on acquisitions at the upscale end of the U.S. wine market, as well as potential divestitures and alliances.

 

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