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US fast food major McDonald’s, at loggerheads with its Indian partner Vikram Bakshi over ownership of their joint venture Connaught Plaza Restaurants, has failed to present a counter-offer for the latter’s 50 per cent stake.
Bakshi had on November 7 offered to sell his stake in the joint venture, which operates fast-food restaurants in the north and east of India, for Rs 1,800 crore.
Rejecting the offer in a hearing at the Company Law Board (CLB) on Monday, McDonald’s did not table how much it was willing to give Bakshi for his stake, persons in the know said. CLB members hearing the case gave it time until November 25 for an offer.
The development comes in the wake of Bakshi rejecting McDonald’s previous offer of Rs 48-50 crore to buy his stake. The offer was based on a complicated formula, which Bakshi did not accept , seeking the appointment of an independent valuer to determine the right valuation.
Bakshi had valued his stake at Rs 2,500 crore while offering to sell it during discussions with McDonald’s executives in April this year, later brought down to Rs 1,800 crore. At that time, there were questions about the number of outlets belonging to him under the joint venture, 163. In comparison, Hardcastle Restaurants, which runs McDonald’s operations in the west and south of the country, has 193 outlets.
McDonald’s had reportedly countered Bakshi’s Rs 2,500-crore offer with Rs 120 crore. In the previous hearing, Bakshi told CLB that McDonald’s offer was “ridiculous” and contrary to the Foreign Exchange Management Act, as it only provided for return on equity.
According to a source, Bakshi’s legal counsel also noted that the valuation did not capture his hard work of 18 years in building McDonald’s a leading brand in India, which was going to have a huge potential in the future.
