Treasury Wine rejects takeover bid

Maker of Penfolds declines Kohlberg Kravis Roberts & Co offer of $4.70 per share.

The board of Treasury Wine Estates (TWE) said it has rejected a preliminary, non-binding and conditional takeover bid of $4.70 per share from Kohlberg Kravis Roberts & Co.

TWE said the offer does not reflect the company's fundamental value and is not in the best interests of shareholders.

The offer was worth some $3.05 billion, according to calculations by Bloomberg. 

KKR requested the proposal be kept confidential, TWE said, since it was first received on April 16. The two parties then entered discussions on the offer.

But TWE learned on Monday that KKR had approached "one or more" of Treasury's shareholders, so the company decided to reveal the proposal before it was leaked. 

In a separate statement, Treasury Wine said it is cutting jobs to help fund a new marketing drive aimed at turning around its financial woes.

The cost-cutting drive is expected to save $35 million in fiscal 2015, mainly through cutting full-time jobs. It said the cuts would affect “all regions and all functions”.

The cost-cutting initiative will result in a one-off item in fiscal2014 of up to $35 million.

Chief Executive Michael Clarke said trading conditions for Treasury continue to be difficult in an intensely competitive environment.

The company owns over 80 brands, has operations across the world, and employs more than 3,500 wine makers, sales and distribution staff.

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