TPG ramps up Asia activity

The firm has offered A$3.4bn for Australia’s Treasury Wine as it recruits a Korea deal maker in Hong Kong

TPG Capital has emerged as a competitor in the buyout of Australian wine business Treasury Wine Estates in a deal worth as much as A$3.4 billion ($3.15 billion; €2.35 billion), rivaling the bid from global private equity firm Kohlberg Kravis Roberts.

Treasury Wine confirmed the receipt of a proposal from a global private equity firm of A$5.20 in cash per share – the same amount KKR and co-investor Rhône Capital bid earlier this month.

Although it did not name the bidder, media has widely reported TPG as the unnamed private equity firm.

KKR and Rhône had previously offered A$3.1 billion for the business in April, although the proposal was rejected on the grounds that the board felt it didn’t reflect the proper value of the company.

Satisfied with the raised bid last week, Treasury Wines said it would engage with KKR and Rhône on a non-exclusive basis, allowing the firms to carry out due diligence.

Treasury Wine is now talking to both private equity bidders, stating there is no certainty that either proposal will result in a formal offer.

“As previously stated, if an offer does result, the board will assess whether it delivers a value proposition that is superior to the expected benefits from management’s renewed strategic plans,” a Treasury Wine statement said.

Its plans include increasing consumer marketing investment in the company’s brands, continuing to drive efficiencies and improve the cost base, and addressing structural opportunities by focusing on commercial brands separately from its luxury portfolio in Australia.

TPG declined to comment on the matter, but it comes as the firm ramps up its activity in Asia Pacific markets, having having closed its sixth Asia-focused vehicle on $3.3 billion in May this year after a difficult two-year fundraising period.

The firm is also this month adding Seung-june Lee to its Hong Kong office as a principal to focus on investments in South Korea, a source close to the matter confirmed to Private Equity International.

Lee joins from Goldman Sachs in Hong Kong, where he also focused on Korea – a relatively quiet market for TPG in recent years.  

Lee’s appointment is one of many recent team changes at TPG in Asia – the firm’s fundraising process rapidly improving after it restructured its Asia Pacific team earlier this year.

In January, senior partner Tim Dattels relocated from the TPG San Francisco headquarters to Hong Kong to become co-head of Asia. He joined Ben Gray as co-head, who is based in Singapore and also serves as managing partner in Korea, Japan, Australia and Southeast Asia.

The same month, TPG appointed Datuk Ganen Sarvananthan, head of investments and executive director at Khazanah Nasional Berhad, to its Southeast Asia investments team.

TPG has also strengthened its China ties this month, receiving a $250 million investment into its management company from China Life Insurance, one of the world’s largest insurers, PEI reported last week. The partnership will allow both parties to access each other’s networks in China and offshore, creating opportunities both ways, one source said.