Fosters rejects $2.7 billion private equity bid on Treasury Wines

Posted by Nicole Eckersley on 9th September 2010

Treasury Wine EstatesFosters announced yesterday that it has recieved and rejected an unsolicted expression of interest, from an international private equity firm, to acquire its wine business Treasury Wine Estates.

The offer comprised a ‘cash consideration of between $2.3 billion and $2.7 billion for 100% of the assets’ of Treasury Wine Estates.

“After considering the value range in the proposal, the Board of Foster’s continues to consider that a separation of the Wine business from the Beer business through a demerger is most likely to represent the best outcome for all Foster’s shareholders,” said a release by the company.

“In addition, the high level of conditionality, the requirement for exclusivity and other terms of the proposal are considered to reduce the value and certainty of the proposal.”

Despite rejecting this ‘significantly undervalued’ offer, the Foster’s board said it would consider any proposal that is in the best interests of shareholders.

Fosters also said that the Treasury Wine Estates transformation program was well underway, and that the business is well positioned to grow over the coming years, and thereby create additional value for Foster’s shareholders.

“Foster’s remains committed to the evaluation of issues, costs and benefits of a potential demerger, with work continuing to progress to schedule,” said the release.