Treasury Wine Soars to Four-Year High After Buying Diageo Unitsby
Stock jumps 14% in Sydney after last week's trading halt ends
Winemaker's market capitalization rises to A$5.4 billion
Treasury Wine Estates Ltd., the maker of Penfolds Grange, jumped to a four-year high in Sydney trading after last week’s agreement to buy most of Diageo Plc’s U.S. and U.K. wine assets for $600 million.
The shares soared 14 percent to A$7.33 at 10:25 a.m. local time, the highest level since May 2011. Treasury now has a market value of A$5.41 billion ($3.93 billion).
The acquisition of wine brands including Beaulieu Vineyards and Sterling Vineyards will instantly double Treasury’s U.S. revenue from luxury and premium wine, according to the Australian company. The stock, which was in a trading halt, leaped even after Treasury also announced on Oct. 14 a A$486 million rights offer to help fund the acquisition.
Chief Executive Officer Michael Clarke is transforming Treasury from an agricultural producer into a brand-led marketing company. Last week, he introduced Treasury’s entire 2015 Penfolds range in Shanghai, the luxury collection’s first launch outside Australia.