Shares of Shoppers Stop surged
nearly 9 per cent in intra-day trade today after the K Raheja
Group's retail arm announced an agreement to sell Hypercity
Retail to Future Group for Rs 655 crore.
The loss-making Hypercity, majority owned by Shoppers
Stop, operates 19 large format premium stores in some key
Shoppers Stop scrips jumped 8.92 per cent to Rs 552.40
during the day on BSE, but pared most of the gains towards the
fag-end to close at Rs 513.20, up 1.19 per cent.
Reacting to the development, shares of Future Retail also
rallied 5.94 per cent to Rs 559 during the day. It later
closed at Rs 537.80, up 1.92 per cent on BSE.
"Shoppers Stop has announced the sale of its entire stake
in HyperCity to Future Retail. We expect the deal to be a
win-win proposition for both players," Edelweiss Securities
said in a report.
The deal will give the Future Retail's flagship retail
chain Big Bazaar access to a premium brand and great locations
in main metros.
The board of both companies decided on the transaction
and according to the term sheet, Future Retail will allot 93.1
lakh shares with a face value of Rs 2 each to Hypercity
promoters, aggregating to Rs 500 crore, on a preferential
basis, Future Retail said in an exchange filing yesterday.
The preferential allotment will be made at a premium
of Rs 535 per share and the remaining Rs 155 crore will be
made upfront in cash.
On completion of the transaction, Hypercity will
become a wholly-owned subsidiary of Future Retail, the
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)