Treasury in takeover bid speculation

  • Wednesday 23 January 2013

Speculation is growing that Penfold's and Wolf Blass owner Treasury Wine Estates could be a takeover target, with a rumoured price tag as high as A$4bn-plus.

Treasury wine estates

Treasury: up for grabs?

According to reports in the Australian press, analysts are increasingly convinced that Treasury Wine Estates will be the subject of a takeover bid, as the Australian wine industry returns to balance after years of over-supply issues.

Despite declines in recent months, the company’s share price has climbed by well over one-third since it was spun off by former parent company Foster’s in May 2011.

Analysts believe China is the most likely source of a serious bid for Treasury, as reports come in of Chinese interest in wineries including Chateau Tanunda and Yering Station owner Rathbone Wine Group.

Sales of Australian wine in China have been booming in recent months, posting strong double-digit increases in the year to the end of September.

Treasury, the world’s second biggest wine business and formerly part of Foster’s, was the subject of much takeover talk before it was demerged from the rest of the Foster’s beer business in May 2011.

Shanghai-based Bright Food was widely reported to have considered a takeover bid in the summer of 2010, and private equity firm Cerberus Capital Management tabled an unsuccessful bid of A$2.5bn later in the year.

There has been no comment from either Treasury or Bright Food.

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