Treasury Wine Estates stock recovering strongly, hitting a 52-week high

By Erin Smith

Published: 17 April, 2015

Treasury Wine Estates stock price hit a 52-week high this week peaking at AUD$5.89 per share before retreating and closing at $5.89.

Treasury Wine Estates stock price hit a 52-week high this week peaking at AUD$5.89 per share before retreating.

The stock's one year return is up 57.66% (TWE:AU).

It is good news for the wine company as it was less than a year ago when it was fending off a possible takeover from capital private equity firm KKR and Rhone Capital. The company made two different bids last year, which TWE rejected. The most recent bid was AUD$3.4 billion in September. At the time the private equity firm was offering to pay AUD$5.20 per share, which TWE's leadership felt undervalued the company.

Today the company announced it would be refinancing a long term loan of AUD$300 million. The company split the loan into two separate borrowing vehicles. The loan's original due date was April 2016 and the split loan now will be AUD$150 million due in April 2018 and the other AUD$150 million due in 2020.

TWE has been selling assets recently in an effort to lower costs and consolidate its supply chain.

In March the company announced it would be selling several different wineries in California as well as in Victoria, Australia. T'Gallant,Bailey's and Rycroft wineries in Australia and the Asti winery in the US were put on the selling block. The Karadoc warehouse is also set to close in 2016.

The sell-off is expected to save an estimated £26 million so that the company can better invest in building brands.

At the end of 2014 at the Annual General Meeting, TWE said it would be focusing on 15 global umbrella brands, 20 international brands and 20 local brands out of its range of over 80 brands.

At the time chief executive Michael Clarke said: "We simply can't invest consumer marketing dollars effectively across 80 brands."

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