Treasury Wine Estates (TWE) has confirmed it has received a fresh proposal from Kohlberg Kravis Roberts and Co (KKR) and Rhone Capital to acquire all of the its shares, with the winemaker set to open its books to the suitors.
The revised offer has KKR seeking to acquire all of TWE's shares for a price of $5.20, a 50c increase on the $4.70 offer lobbed earlier this year. Treasury, which also owns the Lindeman's, Wolf Blass and Rosemount brands and the Beringer and Chateau St Jean labels in the US, rejected a $4.70 offer from KKR in May.
The winemaker's board at the time said the $3.05 billion offer undervalued the company.
The revised offer also represents a 40.9 per cent premium to TWE's closing share price on April 15 of $3.69 per share. Since that offer was rejected, however, TWE shares have strengthened considerably, hitting as high as $5.27 on July 17 and closing out last week at $4.95.
The TWE board said in light of the revised proposal it is in the best interests of shareholders to engage further with KKR and Rhone.
The proposal is subject to several conditions, notably the completion of due diligence to KKR and Rhone's satisfaction, final approval of KKR and Rhone's investment committees and the unanimous recommendation of the TWE board.
At the time of rejecting KKR's previous offer, the TWE did not close the door entirely to a deal, but said any engagement on a sale will require a greater premium than the one put forward.
"We will carefully consider any future proposal that is consistent with this objective [of maximising shareholder value], but we will not support a proposal which does not compensate shareholders sufficiently for the value of their shares," the winemaker said in a letter to shareholders.