Jefferies upbeat on Treasury Wine Estates' $900 mln buyout of DAOU Vineyards

KidariStudio

31/10/2023 19:58

** Analysts at Jefferies are positive on Australian
winemaker Treasury Wine Estates Ltd's  TWE.AX  acquisition of
U.S.-based DAOU Vineyards, a luxury wine brand, for $900 million
    ** Say acquisition increases co's exposure to high margin,
high growth U.S. luxury wine, plugging a portfolio gap at $20 -
$40 per bottle
    ** Contribution from the deal to TWE's fiscal 2025 earnings
per share will be a 4% increase because synergies from the deal
will not fully be realized until fiscal 2026 - Jefferies
    ** Says Paso is a growth region that offers a strong
consumer value proposition and access to fruit 
    ** "However, we believe the price was full and question the
timing; DAOU wasn't a competitive process and waiting for more
clarity on China tariffs may have afforded TWE with cheaper
equity capital" - Jefferies 
    ** Stock down 11% so far this year, as of last close

 (Reporting by Roushni Nair in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com;))