Thoughts on Treasury Wines (TWE) post the cap raise

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Question asked 16/12/2023

Thoughts on Treasury Wines (TWE) post the cap raise

Hi Market Matters Team Can I have your latest view on Treasury Wine. Post the acquisition of DAOU Vineyards and Equity Raising "Entitlements not taken up by institutional shareholders were sold and cleared in the Institutional shortfall bookbuild at A$11.50 per New Share, which was A$0.70 per New Share above the Offer Price" - While the Retail Shortfall Bookbuild did not clear at the offer price of $10.80 per New Share. This fall in share price was an opportunity to buy TWE and with the Institutional bookbuild sold at $11.50 - it looked like the shares would trade above the $10.80. regards Deb

Answer

Hi Deb,

TWE remains only 19c below the $10.80 quoted in your question, i.e. less than 2%.

The last few weeks has seen a number of sectors come back into favour with bang such as Real Estate, Iron Ore and over the last few days lithium, we caution bears getting too negative towards beaten up names at this time of year. We continue to believe the worst is behind TWE and the “cap raise” has created a washout of weak shareholders, hopefully not wise ones as were still long!

TWE could easily be a candidate for a positive rerating into 2024 with the $12 region our initial target once calm returns post the acquisition of DAOU Vineyards.

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Treasury Wine Estates Ltd (TWE)

LAST UPDATED 15/12/2023 22:25

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