BofA Throws Beringer Under Bus, Urges Treasury To Divest ASAP

Throwing a company under the bus seems like an odd way to kick off an asset sale, but that’s what Bank of America./Merrill Lynch seems to be doing with the U.S. assets of Treasury Wine Estates.

On the other hand, it could work well especially if you have two other major brokerages — Citi and Morgan Stanley — touting a highly doubtful global wine shortage.

The spinning of looming shortages to promote wine stocks as a good investments could work again for retail customers  unfamiliar with the public wine stock frenzy/crash/burn of the 1990s. That debacle was driven by a similar shortage myth that also helped create a huge wine tsunami that hit in 2001.

The BofA analyst report is soundly written, lays out a complete set of facts and draws a set of very rational conclusions.

See related articles:

• No Global Wine Shortages: The Real Data
• BofA/Merrill Lynch’s Love Affair With Treasury Wine Australia
• Is there really an impending global wine shortage? (WII editor Lewis Perdue On Public Radio)

An Oct. 29, 2013 Bank of America./Merrill Lynch report on Treasury Wine Estates (TWE) is highly complimentary of TWE’s Australian units, but says of the U.S. Operation, “… TWE has shown over a long period it lacks the ability to succeed in the US – with our view being TWE will continue to destroy value whilst it continues to own its US assets.”

This article will refer to the US assets as Beringer.

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Also In This Article:

The full text of the following sections is available to premium subscribers of Wine Executive News.

• Beringer Now Worth Just 1/2 of Its Acquisition Price

• “Inefficient And Poor Capital Management”

• Spinning Off Beringer – “The Exit Door” – Is The Only Positive

• Break It Up … Sell At A Loss – Just Get Rid Of Beringer

• Investors Take The Not-So-Subtle Hints

• An Investment Banking Circus

 

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