Future Group firm Pantaloon Retail (India) today said it will merge its wholly-owned subsidiary Future Value Retail, which runs Big Bazaar and Food Bazaar stores, with itself.
In a meeting held yesterday, Board of Director of Pantaloon Retail (India) Ltd (PRIL) decided the "merger of Future Value Retail Ltd, a wholly owned subsidiary with the company".
The company, however, did not share details of the proposed merger.
Future Value Retail operates 148 Big Bazaar and 169 Food Bazaar stores, among other formats, in over 70 cities across the country, according to its website. It also runs another retail brand KB's Fairprice.
In a filing to the BSE, PRIL also said it will "demerge business undertaking, comprising all business, activities and operations pertaining to the Pantaloons Format Business of the company and transfer to Peter England Fashions and Retail Ltd (PEFRL) by way of a scheme of arrangement".
The shares of PRIL were trading 4.25% up at Rs 149.65 apiece on BSE during afternoon.
Yesterday, Aditya Birla group firm PEFRL's board had approved the demerger of Pantaloon format business and fixed the share swap ratio at 1:5 -- meaning for every five shares of Pantaloon, the shareholders will get one Peter England
Under the transaction, PRIL will also transfer all undertakings, business, activities and operations pertaining to the 'Pantaloons Format' business to Peter England. Besides, a debt of Rs 1,600 crore will be transferred to PEFRL. The date of transfer has been fixed at July 1, 2012.
As part of the Scheme, Aditya Birla Nuvo Ltd (ABNL) and/or its affiliates intend to make a voluntary open offer to other shareholders of PEFRL.
These developments mark a step closer towards Aditya Birla Group's proposed acquisition of majority stake in Kishore Biyani-led group's flagship Pantaloon format apparel retail business unit.
Post-demerger, the holding of ABNL in PRIL through its subsidiary PEFRL, will be 50.09%.
In April, Future Group gave away majority control of Pantaloon to ABNL for a total consideration of Rs 1,600 crore.
The group, laden with an estimated consolidated debt of Rs 6,000 crore, was understood to have finalised plans to exit from stationery joint venture with US-based Staples by selling its entire stake to the partner for up to Rs 170 crore.
It is also mulling stake sale in Future Generali Insurance, a JV with Italian insurer Generali Group.
The group may hive off part of its 70% stake in Future Supply Chain (FSC), a supply management firm. The remaining 30 per cent is held by Hong Kong-based Li & Fung, which is also interested in hiking its stake in the company.
In June, the group had sold majority stake in Future Capital Holdings to private equity firm Warburg Pincus for Rs 560 crore.
Future Retail stock price
On August 20, 2014, at 14:32 hrs Future Retail was quoting at Rs 123.75, down Rs 0.8, or 0.64 percent. The 52-week high of the share was Rs 147.85 and the 52-week low was Rs 63.30.
The company's trailing 12-month (TTM) EPS was at Rs 3.45 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 35.87. The latest book value of the company is Rs 140.25 per share. At current value, the price-to-book value of the company is 0.88.