Why is the Treasury Wine share price charging higher today?

This wine giant's shares are getting some love from investors on Wednesday.

| More on:
A woman wine tasting in a bottle shop.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Treasury Wine Estates Ltd (ASX: TWE) share price is having a strong session.

In afternoon trade, the wine giant's shares are up 3% to $10.78.

Why is the Treasury Wine share price rising today?

The company's shares are lifting today after a lower-than-expected inflation reading boosted sentiment.

This has sparked hopes that the Reserve Bank won't need to increase rates any further, which could be good news for Treasury Wine's sales in the local market.

If interest rates were to go higher, it could put pressure on spending on discretionary items like wine.

What else?

In other news, the company revealed that it has completed the retail shortfall bookbuild of its capital raising.

This bookbuild represents the final stage of its entitlement offer, which has raised gross proceeds of approximately $825 million.

However, given the recent weakness in the Treasury Wine share price, demand for the retail shortfall bookbuild wasn't strong. So much so, that it did not clear at the offer price of $10.80 per new share.

This means that eligible retail shareholders who elected not to take up their entitlements will not receive any consideration for their retail entitlements. Instead, the 16 million new shares that were on offer will now be issued to the sub-underwriters.

Nevertheless, the company's CEO, Tim Ford, was pleased with the capital raising. He said:

We thank all shareholders who participated in the entitlement offer to support the acquisition of DAOU Vineyards. We now look forward to completion and bringing our two businesses together, accelerating our focus on luxury-led portfolio premiumisation and establishing Treasury Americas as a leading and iconic US luxury wine business.

Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

A man looks a little perplexed as he holds his hand to his head as if thinking about something as he stands in the aisle of a supermarket.
Consumer Staples & Discretionary Shares

Woolworths share price dives 7% following Banducci bombshell

ASX 200 investors are pressuring the Woolworths share price today amid the shock departure of CEO Brad Banducci.

Read more »

Two parents and two children happily eat pizza in their kitchen as a top broker predicts a 46% upside for the Domino's share price
Earnings Results

Domino's share price charges higher on improving outlook

Here's how this struggling pizza chain operator performed during the first half.

Read more »

two men in suits with their backs to the camera walk off into a sunset on a city street with one placing his hand on his companion's shoulder as if in a fond gesture.
Earnings Results

Woolworths shares on watch after CEO exit and $781 million loss

Brad Banducci retires as New Zealand business devastates the supermarket's bottom line.

Read more »

Money Wealth Coin on Shopping Cart and grow up as creative investment ideas.
Dividend Investing

If I invest $10,000 in Woolworths shares, how much dividend income will I receive in 2024?

The supermarket giant is due to report its 1H FY24 results and interim dividend tomorrow.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Earnings Results

Guess which ASX 200 stock is surging 13% after solid half-year result

This stock is charging higher after investors responded positively to its results release.

Read more »

Young man sitting at a table in front of a row of pokie machines staring intently at a laptop. looking at the Crown Resorts share price
52-Week Lows

Star Entertainment share price crashes 26% upon return to trade

This is a new 52-week low.

Read more »

jumbo share price
Consumer Staples & Discretionary Shares

A fund manager is betting on this ASX 300 stock. Is it a buy?

WAM has picked out a compelling stock to buy.

Read more »

Distressed man at a casino puts his head in his hands, covering his face.
Consumer Staples & Discretionary Shares

Star Group share price is frozen in further Sydney license limbo

The drama isn't over for this casino operator in Sydney.

Read more »