KKR & Co. LP’s share price down, sweetens its bid for Treasury Wine Estates to A$3.4 billion

KKR & Co. and Rhone Capital LLC increased their bid for Treasury Wine Estates (TWE) Ltd by 11% to 3.4 billion Australian dollars (3.2 billion dollars). TWE, which is the worlds second-largest listed winemaker, rejected the previous offer of the two American US equity private funds.

Treasury Wine Estates Ltd made an official statement today, which was cited by the Financial Times: “The board of TWE, together with its advisers, has concluded, based on the revised proposal, that it is in the interests of its shareholders to engage further with KKR and Rhône.”

According to a regulatory filing made on Sunday, the two companies made a joint bid that amounted to 5.20 Australian dollars per share. This represents an 11% increase from the initial offer made by KKR on April 16th that amounted to 4.70 Australian dollars per share. The offer is also 5.1% higher than the closing price of Treasury Wine that was estimated to 4.95 Australian dollars a share.

The Chief Investment Officer of Dalton Nicol Reid – Mr. Jamie Nicol commented on the improved bid for the Wall Street Journal: “The price is getting more reasonable.” He also added: “Clearly theres still a return available for KKR at this price and ultimately theyll do the same thing: divest certain assets.”

One of the spokesmen of KKR & Co. LP refused to make any comments on what part of the improved offer was contributed by Rhone Capital LLC.

Now, the improved bid is considered to add more pressure on Mr. Mike Clarke, who currently occupies the position of Chief Executive Officer of Treasury Wine Estates. Mr. Clarke has pledged to bring a new life to the company by making bigger investments on marketing and selling off winery and packaging factories. The company has recently been dealing with some problems in the U.S., which were associated with oversupply.

KKR & Co. LP was 0.13% down to close at $22.89 per share yesterday, marking a one-year change of +10.53%. According to the information published on CNN Money, 13 analysts offering 12-month price forecasts for KKR & Co LP have a median target of $29.00, with a high estimate of $33.00 and a low estimate of $25.00. The median estimate represents a +26.69% increase from the last price of $22.89.