Heritage Foods’ shares rise over 6% on reports of acquisition of retail arm by Future Group
If the acquisition deal goes through it would be the second largest for the company in south India in the past two years and would add over a 100 grocery stores in Hyderabad, Chennai and Bengaluru.
Heritage Foods' shares rose over 6% on reports of an expected sale of its retail arm to Future Group.
Heritage Foods shares on BSE rose by over 6% (6.05%) or Rs 49.55 by 10:32 hours, at Rs 868.00 per piece. While the shares of Future Retail at 10:31 hours were up 0.80% or Rs 1.20, at Rs 153.00 per piece.
Kishore Biyani headed Future Group is in advance talks to acquire the retail arm of Heritage Foods. If the acquisition deal goes through it would be the second largest for the company in south India in the past two years and would add over a 100 grocery stores in Hyderabad, Chennai and Bengaluru.
The acquisition, if completed, will be Biyani’s fourth acquisition in the history of the company, according to an Economic Times report citing people aware of the development. The report further said that the deal may involve a share swap apart from a cash component.
The Heritage Group worth Rs 2,381 crore was founded by current Chief Minister of Andhra Pradesh, N Chandrababu Naidu in 1992. The company has five business verticals which include dairy, retail, agriculture, bakery and renewable energy.
The retail division of Heritage Foods operated 112 stores as of June end and posted a pre-tax loss of Rs 13.8 crore and revenue of about Rs 583 crore in the March 2016 ending quarter, according to its stock exchange filing.
Some of the other purchases of Future Group since 2012 include the Easyday network from Bharti Retail, Big Apple and Nilgiri’s supermarket.
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