Tata Group, on Wednesday, denied reports stating that Tata Group’s consumer unit is in talks with Haldiram’s to buy at least 51 per cent of its shares. In a regulatory filing, Tata Consumer Products said that the company is not in negotiations as reported by Reuters earlier. “We are not aware of any information that has not been announced to the Exchanges, which requires disclosures under Regulation 30 of the SEBI (LODR) Regulations, 2015,” it said in a regulatory filing.
According to the Reuters report which quotes two people aware of the matter, Tata Group’s consumer unit is in talks to buy 51 per cent of Haldiram’s but is not comfortable with the $10 billion valuation sought. The reports further stated that Haldiram’s is also talking with private equity firms including Bain Capital about the sale of a 10 per cent stake.
Tata Consumer Products, which owns UK tea company Tetley and has a partnership with Starbucks in India, has baulked at the $10 billion valuation given that Haldiram’s annual revenue is around $1.5 billion, the sources said. After the Reuters report, Tata Consumer shares surged and closed nearly 4 per cent higher in Mumbai trade.
A third person with direct knowledge of the discussions, according to Reuters, said that Tata wanted to buy more than 51 per cent but has told Haldiram’s that its “ask is very high”. The potential acquisition represents an exciting opportunity for Tata, the person said, adding, “Tata (Consumer) is seen as a tea company. Haldiram’s is huge in the consumer space and has a wide market share.”
Reuters further added that a spokesperson for Tata Consumer Products said it “does not comment on market speculation”. Haldiram’s Chief Executive Krishan Kumar Chutani and Bain declined to comment.