Singapore sovereign wealth fund Temasek is likely to soon reach final agreements to pick up a minority stake of around 9 per cent in Haldiram Snacks Foods Private Limited, the combined FMCG business of the Delhi and Nagpur families of the Indian multinational snacks and savoury foods giant, for around Rs 8,000 crores, multiple industry sources in the know told Moneycontrol on the condition of anonymity.
A 9 per cent stake for Rs 8,000 crores translates into a valuation of around Rs 89,000 crores for the entire firm or around $10 bn, making it one of the biggest transactions in the domestic consumer segment in recent times.
On January 7, Moneycontrol was the first to report that Temasek had signed a term sheet to pick up a sub 10 per cent stake in Haldiram Snacks and would proceed with final pacts later .
" Both parties are planning to sign definitive agreements shortly, possibly as early as this week. Other bidders have expressed interest , but post the final pact, Temasek will emerge as the solo, lead investor with the maximum minority stake," said one of the persons close to the proposed deal.
A second person familiar with ongoing negotiations added, " Temasek has been picked due to its proven track record in the consumer sector plus its partnership mindset. Haldiram is an immensely strong brand and a market leader ."
A third person added that Haldiram Snacks is also mulling the sale of additional minority stake beyond 9 per cent to other suitors beyond Temasek.
"This is intended to be a pre-IPO deal and will set a valuation benchmark of sorts going ahead. Blackstone and Alpha Wave Global have expressed interest earlier in the transaction, so their participation cannot be ruled out for the additional minority stake leg of the deal, though no final call has been taken yet" the third person said.
A fourth person told Moneycontrol that there is industry buzz about HNIs ( high net-worth individuals) potentially participating in the transaction for the additional minority stake, though this could not be independently verified by Moneycontrol.
Earlier news reports have indicated that Haldiram may look to sell upto 20 per cent stake as part of the ongoing attempt to unlock value in the firm.
When contacted, Temasek declined to comment on "market speculation."
Moneycontrol is awaiting the response to an email query sent to the Haldiram Group and will update this story as soon as it hears from the firm. Blackstone declined to comment and Alpha Wave Global could not be reached for an immediate comment.
To be sure, the initial discussions with multiple bidders were linked to the sale of a majority or controlling stake in Haldiram Snacks, but at a later stage, the transaction pivoted to a part stake sale.
Earlier, a demerger of the FMCG business of Haldiram Snacks Private Ltd ( HSPL or Haldiram Delhi group) and Haldiram Foods International Pvt Ltd ( HFIPL or Haldiram Nagpur group) was initiated to set up a newly incorporated entity named Haldiram Snacks Foods Private Ltd (HSFPL), wherein existing shareholders of HSPL and HFIPL would acquire 56 per cent and 44 per cent shareholding respectively.
According to a report by Crisil Ratings, the Haldiram Group's product profile is "diversified, comprising snacks, namkeen, sweets, ready to eat / pre-mix food, frozen food, biscuits, non-carbonated ready to drink beverages, pasta, etc. The group has diverse presence in India and exports to various countries outside India, including the United states of America and Europe."
Meanwhile, shares of Haldiram's smaller listed peer Bikaji Foods International have risen by 22.5 per cent in the last year. The firm's market cap stood at around Rs 16,000 crores at the end of day's trade on March 11.
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