(Corrects paragraph two to make clear the initial bid was by KKR alone and not with Rhone Capital)
* Treasury opens books after improved offer from KKR, Rhone
* Revised offer could flush out other bidders for world No.2
* Offer now valued at A$5.20 a share vs A$4.70 rejected in May
SYDNEY, Aug 4 (Reuters) - Australia's Treasury Wine Estates is opening its books to Kohlberg Kravis Roberts & Co LP after the private equity giant hiked its takeover offer to $3.15 billion, raising the prospect of a bidding war for the world's No.2 winemaker.
Treasury, which rejected a $2.9 billion unsolicited bid from KKR LLC in April, said the 10.6 percent rise in the offer price meant it was now "in the interests of shareholders to engage further."
Asia's growing appetite for wine, the value of Treasury's Penfolds label and an ongoing restructuring are helping turn perceptions of the company's prospects around after a horror 2013 saw profits slump 38 percent in the six months to February.
China's Bright Food Group Co Ltd, France's Pernod Ricard and the world's biggest wine maker, U.S.-based Constellation Brands Inc, have all been mooted as potential buyers of Treasury.
"Absolutely there are (rival bidders), they've now kind of set a starting point for the price," said Shannon Rivkin, director at Rivkin Securities. "This is going to be the point now where anyone who has any interest will be able to have a look at the books as well."
Treasury, which also owns the Wolfblass and Beringer brands, stressed it was providing KKR and Rhone with "non-exclusive" access to its books for due diligence and that there was no certainty any offer would be forthcoming.
Treasury rejected KKR and Rhone's A$4.70 per share bid as too low in May after KKR began approaching investors directly.
The new A$5.20 offer is a five percent premium to Treasury's A$4.95 share price close on Friday.
Treasury's shares have fallen from an all-time high of A$6.43 a year ago amid slashed earnings forecasts, oversupply problems in its U.S arm and sluggish sales in China.
If a firm offer did result, Treasury said it would assess whether it provided superior value to plans the company already had to cut costs and improve its performance, which included separating its Australian luxury and mass prestige portfolio from its lower value commercial brand portfolio.
Rivkin cautioned that a closer look at the books could also raise concerns - and possibly a lower price - pointing to the recent takeover of struggling food maker Goodman Fielder Ltd by Malaysian billionaire Robert Kuok's Wilmar International Ltd.
Wilmar and Hong Kong investment firm First Pacific convinced Goodman to accept a lower offer after a look at the books resulted in the Australasian firm warning of a massive impairment charge due to pressures on its baking unit.
"I think this is a starting bid, once they have a look through, if there are any issues there that the market's not aware of they could still very easily walk away," Rivkin said of the KKR offer for Treasury.
Treasury's problems are reflected in the broader Australian wine industry, which has struggled through volatile market conditions and a high currency in recent years.
Treasury - which posted sales worth A$1.7 billion in the 2013 financial year - has tried to stave off takeovers by cutting costs and installing new CEO Michael Clarke in April.
Former CEO David Dearie was sacked in September last year after presiding over a A$160 million charge due to the destruction of thousands of gallons of cheap wine exported to the United States.
An efficiency drive imposed by Clarke is expected to generate A$35 million in savings in the 2015 financial year by shedding jobs and rationalising office space, I.T. and non-essential spending.
The company, which is scheduled to release full-year results on Aug. 21, is also counting on its Penfolds release to boost sales in the second half of the 2013-14 financial year.
(Reporting by Jane Wardell, Thuy Ong and Lincoln Feast; Editing by Stephen Coates)