Bhoomika Singh
A report has created chaos in the market that, Tata Group‘s consumer division Tata Consumer Products Ltd. is in talks with the snack maker giant Haldiram’s about its acquisition.
Report or Rumour?
According to a report published on September 6, by an international multimedia news provider Reuters, Tata Consumer wants to acquire more than 51 per cent of stakes but Haldiram’s demand for a US$ 10 billion valuation, is a barrier in concluding the deal. “Tata Group’s consumer unit is in talks to buy at least 51 per cent of popular Indian snack food maker Haldiram’s but is not comfortable with the $10 billion valuation sought, two people briefed on the matter said,” Reuters reported.
“A third person with direct knowledge of the discussions said Tata wants to buy more than 51 per cent but has told Haldiram’s that its “ask is very high”, the report noted. The report also shared that Tata Consumers has baulked at the US$ 10 billion valuation given that Haldiram’s annual revenue is around US$ 1.5 billion as the sources said.
Interestingly, Tata Cunsumer’s shares jumped to 4 per cent in the Bombay Stock Exchange, as soon as Reuters published the report. The news provider also said that Haldiram’s is also talking with private equity firms including Bain Capital about the sale of a 10 per cent stake.
True or False?
However, there’s a big twist to the story as FMCG giant Tata Consumer denied any talks about acquiring Haldiram’s. Tata Consumer stated in a regulatory filing, in reference to the news article and gave the clarification sought by the National Stock Exchange of India Limited (“NSE”) and Bombay Stock Exchange Limited (“BSE”) on this news item, later on the same day (Sep 6).
Tata Consumer clarified the following as sought in the letter/email from NSE and BSE:
(a) Whether such negotiations/events were taking place? If so, you are advised to provide the said information along with the sequence of events in chronological order from the start of negotiations/events till date.
Ans: The Company is not in negotiations as reported in the above-referred news article.
(b) Whether you/company are aware of any information that has not been announced to the Exchanges which could explain the movement in the trading, if any? Further, you are advised to provide the said information and the reasons for not disclosing the same to the Exchange earlier as required under regulation 30 of the SEBI (LODR) Regulations, 2015.
Ans: 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.
(c) The material impact of this article on the Company.
Ans: There is no impact of this article on the Company.
Further, the FMCG giant added that the Company evaluates various strategic opportunities for growth and expansion of the business of the Company, on an ongoing basis. The Company will make appropriate announcements in compliance with the obligations under SEBI (LODR) Regulations, 2015, as and when any such requirement arises.
Along with Tata, Haldiram’s also denied the talk of acquisition, as it released a statement. Haldiram’s management has stated that they are not in a discussion with Tata Group about a takeover. “We categorically deny recent reports of a 51% stake sale and wish to clarify that we are not engaged in any discussions with Tata Consumer Products,” read the statement by Haldiram’s.
Furthermore, after clarifying the rumour and denying acquisition talks, the shares of Tata Consumer fell by 3 per cent during the early deals on Thursday, September 7.
