Friday, November 20, 2009

Pantaloon's tie-up with an international retailer in final stages



Pantaloon Retail is looking at acquiring a food led fast moving consumer goods (FMCG) business. It is in the final stages for Big Bazaar tie-up with international player.

Here is a verbatim transcript of Haresh Soneji’s comments on CNBC-TV18.

The company is into value unlocking thing. So it is going in for a holding company kind of structure where in all the businesses apart from retail business is unlocked and transferred to a holding company. Hence, pure retail will remain under Pantaloon Retail and the shareholders of the company will receive shares in the swap ratio which will be decided. A postal ballot is already on and the decision will be announced on December 16.

Apart from that, the company is close to an international tie up with an European retail major. This will help the company get into a Hyper Mart as well as cash and carry business. Pantaloon is looking at acquiring a food led FMCG business. Its private labels in the FMCG space, which do around Rs 125-130 crore annually and the acquisition in this space will help Pantaloon go in with logistics of that food led FMCG business. This is how they will see growth multiplying in this segment. We might see a deal announced soon on the e-zone front.

In the E-zone segment, which is an electronic bazaar segment of Pantaloon, ICICI Ventures and Bajaj, it holds close to about 33% stake. Tata Croma’s private equity (PE) deal is also likely. Hence, a PE player will come in and ICICI Ventures and Kotak Mahindra will find an exit. The market is clearly excited on the stock.

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