After weeks of protracted negotiations, Tata Consumer Products Ltd (TCPL) has emerged as the leading contender to acquire Capital Foods Pvt Ltd.
The final stages of discussions are presently in progress to determine whether the current shareholders will completely divest their stakes. Initially, TCPL will acquire 65-70 percent of the company from its three investors, with plans to acquire the remaining stake over a gradual period. The company’s valuation stands at Rs 5,500. Competing for a stake in Capital Foods are other contenders such as Nestle SA, with advisory support from Kotak Mahindra, representing the Kraft Heinz Co. in the deal.
In 2022, Capital Foods’ trio of primary shareholders opted to put the company up for sale. These three entities include the US private equity group General Atlantic, holding a 35 percent stake; Invus Group, a European family office, with a 40 percent stake; and Ajay Gupta, who owns 25 percent and serves as the founder chairman of Capital Foods.
Ajay Gupta is expected to remain involved with the company for the foreseeable future.
Capital Foods had garnered interest from a range of multinational corporations and domestic companies, including ITC, Hindustan Unilever, Orkla, Nissin Foods, and McCormick. Initially, the asking price had been considerably higher, at Rs.12,442 Cr.
On Thursday, Tata Consumer Products’ shares closed flat at Rs. 870.10, marking a marginal increase of 0.05 percent.