If you’re a Treasury Wines (ASX: TWE) shareholder you may be wondering about the recent entitlement offer and what it means for you.
TWE is essentially issuing new shares at $10.80 per share as a way of funding their acquisition of DAOU Vineyards, LLC and its associated entities.
If you were an eligible TWE shareholder, holding TWE shares on the 31st of October 2023, you will receive 1 entitlement to buy an TWE share at $10.80 for every 9.45 existing TWE shares you hold.
Given that, at the time of writing, TWE is currently trading above $10.80, these entitlements currently have intrinsic value.
If you have received these entitlements, you have a few options:
Option 1: You can take up the entitlements. To do so, head to: https://www.tweoffer.com.au/offer/ and follow the prompts. You have up until 5:00 PM AEDT on the 23rd November 2023 to take up this option.
Option 2: You can sell your entitlements on the ASX. These entitlements are trading under the code ‘TWER’ and they will trade up until the 16th November 2023. The value of TWER should roughly be the intrinsic value of the entitlement (TWE is $11.30 per share at the time of writing less the entitlement price of $10.80 means TWER should be trading around $0.50). You should contact your broker should you wish to do this.
Option 3: Do nothing. In this case your entitlements will be sold through the retail shortfall bookbuild process, which will occur on the 28th November 2023. Although you will likely get close to the intrinsic value of the entitlement at this date, there is NO GUARANTEE you will receive any value for the entitlements sold through the shortfall bookbuild. Any premium received during this process will be paid to you on or about the 1st December 2023.
What option you choose may be influenced by tax or funding considerations.
Below is an indicative timetable of the relevant dates for the offer:
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