Treasury Wine Estates shares soar high as Chinese food group mulls takeover

Treasury Wine Estates, a global winemaking and distribution business based in Australia, said its shares have grown to 11.3%, valuing the company at $2.6bn after a report said that China's Bright Food Group was mulling on a bid for the company.

Treasury Wine was sold by Foster's Group in May to its shareholders as the brewer failed in its attempt to expand into wine industry, which resulted in nearly AU$3bn in terms of devaluation.

As the demerger happened, both companies were eyed as potential targets for acquisition. However, Foster's has rejected a $10bn takeover offer from SABMiller.

Bright Food is a privately held firm beaten in a AU$1.7bn bid for CSR's sugar business last year, and also lost out in a bidding race for French yoghurt maker Yoplait in March.

Treasury Wine shares rose as much as 11.3% to a record AU$3.75, valuing the company at AU$2.4 bn, which is nearly $2.6bn. Last year when Foster's still held the ownership of the wine business, it denied a surprise takeover bid for the wine business worth nearly AU$2.5bn from Cerberus Capital Management (CBS.UL), a private equity firm in the US.

Foster's books have valued the wine business at AU$3.1, about half of what the company spent on acquisitions in a decade-long expansion at the top of the market. The latest AU$1.3bn devaluation last year took the total value reduction on wine assets to nearly AU$3bn.

Foster's chief executive John Pollaers said there was no intention at all in de-merging the company to set it up for a takeover.