Chhabria's ABD to acquire Tilaknagar Industries

The Kishore Chhabria-controlled Allied Blenders & Distillers has entered the final round of negotiations to acquire a controlling stake in Tilaknagar Industries, the owner of Mansion House brandy.

Chhabria and Amit Dahanukar, chairman & managing director of Tilaknagar Industries, are slated to meet in London on Monday to finalise the deal.

Also present during the negotiations will be Ashok Wadhwa of Ambit Capital, engaged by the Dahanukar family to find a buyer for its 55 per cent stake in their strapped-for-cash company, two people involved in the transaction told Business Standard.

DISTILLERY DEAL

• Kishore Chhabria and Amit Dahanukar, CMD of Tilaknagar Industries, are slated to meet in London on Monday to finalise the deal
• Dahanukar is likely to ask for Rs 50-60 a share
• This will value the Dahanukar stake between Rs 340 crore and Rs 410 crore
• Deal could involve the Dahanukar family selling a part of its stake and Tilaknagar Industries issuing shares on a preferential basis to Chhabria
• It could trigger an open offer from Chhabria to other shareholders of the company
• In this scenario, the Dahanukar family will retain a ‘significant minority stake’ in the company

According to one of them, Dahanukar is likely to ask for Rs 50-60 per share, a substantial premium over Tilaknagar Industries' closing price of Rs 17.70 a share on Friday on the National Stock Exchange. This will value the Dahanukar stake between Rs 340 crore and Rs 410 crore.

Various options are likely to be discussed at the meeting.

The deal could involve the Dahanukar family selling a part of its stake and Tilaknagar Industries issuing shares on a preferential basis to Chhabria. This could trigger an open offer from Chhabria to the other shareholders of the company. In this scenario, the Dahanukar family will retain a 'significant minority stake' in the company.

It is worth noting that Chhabria's Allied Blenders & Distributors is engaged in a legal battle with Tilaknagar Industries over the marketing rights for Mansion House brandy. If the London talks are fruitful, the dispute could come to an end.

In between, the Dahanukars were reported to be in talks with Pernod Ricard and Suntory to sell a minority stake. They are also known to have initiated talks with Distell of Africa to sell a couple of Tilaknagar Industries' brands. But now it looks like Chhabria will walk away with the company.

Allied Blenders & Distillers' Officer's Choice is the largest-selling whisky in the country, and the acquisition of Tilaknagar Industries will give it another strong brand in Mansion House brandy. Tilaknagar Industries also owns Courrier Napoleon brandy, Mansion House whisky and Senate Royale whisky.