* Treasury Wine, Bright Food deny they are in talks
* Treasury Wine rejected $2.9 bln KKR bid three days ago
* Bright Food struck deal for control of Israel's Tnuva this
(Recasts and adds analyst comments)
By Byron Kaye
SYDNEY, May 23 Australia's Treasury Wine Estates
Ltd, the world's No. 2 wine company, denied it was
talks to be acquired by China's Bright Food Group Co Ltd
, the latest potential suitor named in a string of
media reports that have sent its share price surging.
Bright Food also denied the report of talks by the
Australian Financial Review, which comes just three days after
Treasury Wine rejected a A$3.1 billion ($2.9 billion) takeover
bid from U.S. private equity firm KKR & Co.
Treasury Wine, spun off from Fosters Group Ltd in 2011, has
been considered a takeover target since late 2013 when it
slashed earnings forecasts, ousted its CEO and revealed that its
U.S. arm was forced to destroy wine because of oversupply.
Its portfolio, which includes the Beringer and high-end
Penfolds labels, makes it especially attractive for companies
hoping to capitalise on growing demand for luxury goods in Asia
as the region's middle class expands.
Earlier this month, the Australian firm denied French liquor
giant Pernod Ricard SA and U.S. wine behemoth
Constellation Brands had made separate approaches for
its U.S. business.
Treasury Wine's shares have jumped since it disclosed the
KKR bid, and on Friday the stock was trading at A$5.21 as of
05.00 GMT, up 5.5 percent and a 10 percent premium to the KKR
"Given that there's other potential buyers out there that
may have a lower cost of capital (than KKR), I guess it's not
inconceivable that someone comes out with a higher bid and
that's what's got the market excited," said Morningstar analyst
A Treasury Wine spokesman said there were no discussions
between Treasury Wine and Bright Food. A Shanghai-based Bright
Food spokesman said the company had no plans to buy Treasury
Wine or other wine makers in Australia.
Bright Food just struck a deal on Thursday to buy a 56
percent stake in Israel's largest food company, dairy firm
Tnuva, from private equity house Apax in a deal
estimated to value the company at about $2.5 billion.
Others noted that Bright Food does not have that much
experience with the wine market.
"Bright are more a grocery-based company rather than an
alcoholic beverages-based company - it's what they know and what
they do. I would suggest it would be unlikely," said Evan Lucas,
market strategist at IG.
"However, the Chinese do look for good assets where they can
find it. It doesn't matter what it's in, they'll look at
snapping it up."
In January it bought Western Australian yoghurt and cheese
producer Mundella Foods for an undisclosed sum.
In 2011, it paid A$530 million for a 75 per cent stake in
Australian food supplier Manassen. In 2012, it bought 60 percent
of British cereal maker Weetabix for £1.2 billion and four years
ago picked up a 51 per cent stake in New Zealand dairy producer
Synlait for $US58 million.
($1 = 1.0828 Australian Dollars)
(Additional reporting by Thuy Ong in Sydney and David Lin in
Shanghai; Editing by Edwina Gibbs)