Shares of Australian wine giant Treasury Wine Estates Ltd. experienced a significant surge, jumping approximately 7% in Sydney trading. This marked their largest single-day gain since September 2024. The rally was triggered by the revelation that European billionaire Olivier Goudet has become a major shareholder in the company, providing a much-needed vote of confidence.
A Strategic Stake by a Global Investor
The boost came after an exchange filing on Wednesday showed that Olivier Goudet, through his investment vehicle Platin SARL, has taken a 5% stake in Treasury Wine Estates. The company, famous for its Penfolds brand, has a market capitalisation of about A$4.3 billion (US$2.8 billion). Following the news, Treasury shares were up 6% at A$5.33 by early afternoon in Sydney.
This investment arrives at a critical juncture for the winemaker. Earlier this month, its shares had slumped to their lowest level in over a decade. The company is grappling with flagging demand in its key markets, the United States and China. In response to these challenges, Treasury has taken several drastic measures.
Navigating Turbulent Times for the Winemaker
The company's struggles have led to a series of strategic reversals and cost-cutting initiatives. Treasury Wine has canceled a planned A$200 million stock buyback program and is reviewing all scheduled capital investments. Under its new Chief Executive Officer, Sam Fischer, the firm announced a major restructuring plan last week.
This plan includes asset sales and a pursuit of A$100 million in annual cost cuts over the next two to three years. The challenges are multifaceted: weakness in the US market has been compounded by a distributor transition in California. Meanwhile, in China, Beijing's continued crackdown on extravagant government banquets has dampened demand for premium wines.
In a move that underscored the depth of its US troubles, the company announced a near A$690 million write-down of its US business. This significant impairment charge highlights the persistent challenges facing the vintner, even as a high-profile investor steps in.
The Profile of the New Investor: Olivier Goudet
Olivier Goudet is no ordinary investor. He is a co-founder of the powerful private investment firm JAB Holdings BV, which controls or holds significant stakes in a portfolio of global consumer brands. Notable names in JAB's stable include Dr Pepper, Krispy Kreme, and Panera Brands.
Goudet served as the CEO of JAB for 12 years before stepping down. In early last year, he transitioned to the role of senior investment advisor for the firm. His decision to take a personal stake in Treasury Wine Estates is seen as a strong signal of his belief in the long-term value and potential turnaround of the iconic Australian winemaker.
