Breakingviews – Capital Calls: Duckhorn brews, Treasury Wine stews


Bottles of Penfolds Grange are on sale at a wine shop in central Sydney August 4, 2014. REUTERS/David Gray

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THROUGH A GLASS DARKLY. For all its headaches of late, Australia’s Treasury Wine Estates at least didn’t have publicly traded direct competitors. That changed on Thursday with Napa-based vintner Duckhorn Portfolio’s share sale.

China’s tariffs on Aussie vino have hit hard. But Treasury Wines was ill-prepared for problems like an oversupply of cheap California plonk more than a year ago. Boss Tim Ford last month unveiled a reorganisation that’ll make it easier to sell a division. Last week he offloaded some low-margin U.S. brands.

Treasury Wine’s enterprise trades at around 14 times EBITDA for the 12 months to the end of December. After a near-20% jump on its market debut, Duckhorn was quaffing on a multiple of 19. That’s roughly the value blank-check firm Bespoke Capital put on Vintage Wine estates in their pending merger announced last month, too. The longer those vintages are allowed to breathe, the greater the pressure will be on Ford to act. (By Antony Currie)

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