US fund Wellington buys up Treasury Wine shares as other bail out

(SMH) - Large US fund manager Wellington Management has ploughed an extra $25 million into buying shares in the ailing wine group Treasury Wine Estates.

Boston-based Wellington was buying up shares as other investors were bailing out late last week during the hefty share price slide of 20 per cent when Treasury revealed a $40 million profit downgrade as it came out of a trading halt.

Wellington is now one of Treasury’s biggest shareholders after spending $5.4 million buying Treasury shares last Thursday, and then splashed out a further $19.8 million on Friday to lift its holding further, in the wake of the share price rout.

Wellington told the ASX early on Tuesday that it now held 5.73 per cent of Treasury Wines.

It comes as another large global fund manager, BlackRock Group, dipped below the 5.0 per cent mark which requires an entity to disclose it has become a substantial shareholder. Some of BlackRock’s funds lightened their holdings in Treasury late last week, causing BlackRock to slip below the 5.0 per cent threshold.

The BlackRock holdings in Treasury have been fluctuating between slightly above 5.0 per cent and then dipping back below that mark on several occasions over the past couple of weeks.

Treasury, the owner of brands including Penfolds, Wolf Blass, Lindemans, Rosemount, Seppelt and Saltram, had a bad December in 2013. Its sales and profits slid because of a new strategy around promotions and discounts, and tougher times in China.