Takeover target Treasury Wine Estates has hinted it will not engage with suitor Kohlberg Kravis Roberts after its board sent a letter to shareholders explaining the rationale for rejecting the $3.05 billion unsolicited bid.
“Your board spent considerable time evaluating the proposal in the context of the company’s plans to drive growth and profitability,” TWE said in the letter.
“We concluded that the proposal did not reflect the fundamental value of the company and that it was therefore not in the best interests of our shareholders.
“As a result, we do not intend to take any further action in relation to this proposal.”
The board 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 by KKR.
“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 letter read.
The release of the letter after the close of trade yesterday came as TWE shares hit a 10-month high, driven up by optimism of a revised bid from KKR or a new bidder emerging.
Stock in the firm now sits at $5.25, about 12% above KKR’s offer of $4.70 per share.