Future Retail to acquire HyperCity for Rs 655 crore

Future Retail to acquire HyperCity for Rs 655 crore”

The company will allot 9.31 million shares at Rs 537 apiece.

The stock hit an intraday high of Rs. 525 and intraday low of 498.55.

The transaction will strengthen Future Retail's presence in the hypermarket segment.

Through the deal, the Future Group will add about 1.4 million square feet of retail space.

HyperCity racked up losses worth Rs 84.73 crore in FY17 on sales of Rs 1,191 crore.

On Friday, Future Retail announced that it will acquire Shoppers Stop's loss-making retail chain HyperCity for Rs 655 crore in a part cash and part stock deal.

The remaining Rs 155 cr would be paid in cash. The deal is expected to be sealed over the next 3-5 months, subject to approvals.

Future Retail is the flagship company of Future Group.

Over the years, Biyani has been on a buyout spree, pocketing one retail network after another including Easyday chain from Bharti Enterprises, Delhi-based Big Apple and southern chains of Nigiris and Heritage Foods and extending his footprints nationwide. It also operated seven Foodhall stores, 30 Ezone electronic outlets and 37 furniture stores under the HomeTown brand, according to an analyst presentation.

Quoting data furnished by Euromonitor, ET reported that Big Bazaar is now India's market leader in organised store-based retail market, with a 22.4 percent market share.

ET was the first to break the news that Future Group is in talks with the promoters of HyperCity for a possible acquisition on September 13th edition.

The deal will put even more distance between Future, which operates chains such as Big Bazaar and Central, and other players in India's organized retail market. It had purchased Nilgiri's, a south India-based chain, in November 2014.

Mishra said that Biyani is also focusing on expanding the company's consumer goods business and HyperCity could be a platform to launch more premium products.

The deal will help Shopper's Stop will reduce debt loads though it would depend on the details of the deal, said Abneesh Roy, Senior Vice-President of Edelweiss Securities.

Retailer Shoppers Stop Ltd's chief executive officer Salil Nair has resigned, .

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