Hot Deals: MTR ready to beat a retreat from foods

NEW DELHI: The Maiya family has put MTR’s packaged food business on the block. The Bangalore-based food major is in talks with private equity (PE) firms and interested companies to divest a majority stake. Actis is learnt to be the frontrunner among the PE bidders.

Sources said the promoters, however, want to retain their popular food joints in Bangalore and Chennai — Namma MTR and MTR kiosks. The company has mandated investment bankers including PWC to look for a buyer. When contacted by ET, the company denied any such development.

“We do not comment on market speculations. The company has full support of its investors, one of which is JP Morgan. We are looking at various options to carry it through to the next stage of growth and all decisions will be taken with the mutual consent of the management and the investors,” Sadanand Maiya, CMD, MTR, said in response to an e-mail.

The development comes close on the heels of reports that 26% stakeholder JP Morgan Chase plans to exit the company. The US-based PE firm is believed to have informed the Maiya family about its intent. Mr Maiya holds 40% stake, while Singapore-based PE fund Aquarius holds 15%. Mr Maiya’s relatives and associates hold a huge part of the remaining 19% stake.

Interestingly, this is not the first time MTR has stuck its neck out for a buyer. It has earlier looked for a buyer much like Nutrine, which went through many sell-off attempts before being bought by Godrej.

While the price tag on MTR couldn’t be ascertained, three years ago former Britannia MD Sunil Alagh had offered Rs 110 crore to buy it. The deal could not materialise since promoters were looking at aggressive valuations.

Poor offtake, inventory pile-ups and losses have prompted MTR to revive its sell-off plans. The company is learnt to have made losses on sales of Rs 135 crore in ’05-06.