Shares of Coffee Day Enterprises ended on August 28 locked at 5 percent lower circuit after media reports indicated that private equity (PE) player TPG Capital is planning to takeover the firm for about Rs 4,000 crore. The valuation set by the PE firm is much lower than what late founder VG Siddhartha was seeking.
The scrip was trading in the positive for seven consecutive sessions prior to the report.
According to a report in The Economic Times, TPG Capital is in talks to potentially acquire Coffee Day Global. "The proposed transaction is expected to value the coffee chain between Rs 3,500 and Rs 4,000 crore. The transaction will not include its vending machine business," a source told the publication.
The company’s late founder VG Siddhartha was seeking a valuation of Rs 8,000-10,000 crore, the report said.
CDG, which runs the Cafe Coffee Day chain, is owned by listed entity Coffee Day Enterprises (CDE). The chain has about 1,750 outlets across the country.
As of July 31, CDG has a total debt of Rs 1,097 crore. CDE recently sold Global Tech Village Tech Park in Bengaluru to Blackstone Group for about Rs 2,600-3,000 crore to help clear its debt position.
Coffee Day Group’s promoters have renewed discussions with beverage giant Coca-Cola over a possible stake sale, according to a media report. The company has termed the report 'factually inaccurate'.
Coffee Day Enterprises closed at Rs 82.75, down Rs 4.35, or 4.99 percent.
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