Blackstone Inc has sweetened its offer for Haldiram’s, the iconic Indian fast-food chain, in a move that will likely pave the way for the private equity firm’s entry into India’s lucrative snacks market.
The buyout fund, as part of a consortium of investors, is likely to bid around Rs 40,000 crore for a 51 percent stake in Haldiram’s, people familiar with the talks said. The deal will peg Haldiram's valuations at between Rs 70,000 and 78,000 crore. The final offer to the promoters of the snacks maker will be contingent on the outcome of the due diligence process. This deal would potentially give the private equity firm control of Haldiram’s product business, for which Blackstone will get a perpetual licence.
Some of the contentious issues that were holding up the deal, such as the ownership of restaurants and brand licence, are said to have been resolved, the people said, requesting anonymity. Brand rights and control over the restaurants’ operations will rest with the family.
“The deal and valuations were getting stretched on these issues, and now, with the matter brought to a closure, the deal should close soon,” a banker, one of the people cited above, said.
This would mean that the Haldiram family would be entitled to an annual royalty from the new owners for using Haldiram’s brand as part of the terms of the sale.
EY is conducting due diligence on Haldiram’s on behalf of Blackstone. Singapore’s GIC and Abu Dhabi Investment Authority are part of the consortium. Blackstone will hold the majority stake.
In response to a query on the possible deal, a spokesperson for Blackstone said the buyout firm “has not re-bid for Haldiram’s (We had submitted an initial proposal in the month of May 2024). The discussion did not move forward because of the valuation mismatch”.
Haldiram’s CEO, Krishan Kumar Chutani, declined to comment on the matter.
On July 8 Moneycontrol reported that Blackstone was in advanced talks to acquire a controlling stake in Haldiram’s. On May 14, the Economic Times reported that Blackstone may acquire 76 percent of the snacks maker.
Details such as the possible licensing arrangements for the brand and ownership of the QSR restaurants have not been reported before.
Haldiram’s has been in talks with buyers since September 2023.
With the transaction taking longer than expected, it was also reported that Haldiram’s may be exploring listing its shares on the stock exchange.
Earlier this year, Singapore’s Temasek and Bain joined the race to acquire the 87-year-old sweets and snacks manufacturer.
“Now the talks with Blackstone have reached finality, and at a valuation of Rs 78,000 crore for 51 percent, this is the best offer received for the company,” said a banker aware of the matter.
With the potential buyer initiating due diligence, people privy to the transaction said a binding term sheet for the transaction could be finalized within the next 6-8 weeks.
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