 "Tilaknagar Industries")
The contours of the proposed deal between the Dahanukar family and Kishore Chhabria for Tilaknagar Industries may have changed. Till recently, the Dahanukars were in talks with Chhabria, who controls Allied Blenders & Distillers, to sell their 55 per cent stake in the company. Now, it seems, the family will not sell its stake; instead, Tilaknagar Industries will issue shares to Chhabria on a preferential basis.
When contacted, Amit Dahanukar, the chairman and managing director of Tilaknagar Industries, neither confirmed nor denied the development.
The preferential allotment, combined with the mandatory open offer, will give a 45-50 per cent stake to Chhabria, while the shareholding of the Dahanukars will come down to around 30 per cent, according to a person close to the deal.
In the old deal, for which Chhabria and Dahanukar had met in London in July, the money would have gone to the Dahanukars. Now, it will flow into the company. The acquisition could cost Chhabria between Rs 250 crore and Rs 400 crore. "We are looking at raising funds," Dahanukar said, without giving details. This infusion of funds should bring some relief to Tilaknagar, which has a debt burden of almost Rs 800 crore on its books.
In July, the Dahanukars had demanded Rs 50-60 a share for their stake, but now the price being negotiated is Rs 40-50 a share, which is still a sizeable premium over Tilaknagar's current price of around Rs 23 on the stock market. The source said the due diligence was likely to start soon, and the deal should get concluded in the next eight to 10 weeks. Tilaknagar's largest brand is Mansion House brandy. It also owns Courrier Napoleon brandy, Mansion House whiskey and Senate Royal whiskey. Chhabria's Allied Blenders & Distillers owns Officer's Choice, India's largest-selling whiskey.
Allied Blenders & Distributors is engaged in a legal battle with Tilaknagar over the marketing rights for Mansion House brandy. If the current talks are fruitful, the dispute could come to an end. In the past, 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's brands. Now, they seem to have settled in favour of Chhabria.
STEP BY STEP
- The buyout could cost Chhabria between Rs 250 cr and Rs 400 cr
- This infusion should bring some relief to Tilaknagar, which has a debt of almost Rs 800 cr
- Due diligence is likely to start soon, and the deal should end in the next eight to 10 weeks
