MTR promoters in talks with Tatas for stake sale
The bidding process for MTR Foods is bouncing back to life with the promoters, the Maiya family, entering into active talks with the Tata Group.
By Boby Kurian & Chaitali Chakravarty, TNN |
BANGALORE/ NEW DELHI: The bidding process for MTR Foods is bouncing back to life with the promoters, the Maiya family, entering into active talks with the Tata Group.
Sources said the likelihood of Tatas clinching a deal with the Rs 135-crore MTR comes even as other bidders like Godrej Foods & Beverages, McCormick-AVT combine, Navis Capital and Indivision remain in the fray. The negotiations between Tatas and Maiya are being leverged on a personal rapport the latter enjoys with a top Tata Group official.
Tatas’ interest in the processed foods company was likely to be routed through Tata Coffee. MH Ashraff, MD of Tata Coffee, declined to comment. A questionnaire to Sadananda Maiya, chairman of MTR, remained unanswered.
It is learnt that the Maiya family was interested in a tango with the Tatas, who could come in as a strategic investor without pushing for a buyout. Sources said the talks centred on Tatas, who have no interest in the processed food sector at present, picking up a substantial stake, if not a majority control, and allow the Maiya family to run the operations through a professional management.
MTR could cut a deal with the Tatas even if the valuation does not match up to the highest bidder in the fray. “The talks with Tatas on the pricing front is still inconclusive and may require a final decisive sitting,” a source said. It must be mentioned that NM Rothschild had put a value of Rs 300 crore on the company when it called for bids two months back.
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Sources said Rothschild has received at least two expressions valuing MTR Foods at Rs 250-300 crore. However, these proposals have indicated interest for a buyout or an overwhelming majority stake, which is unlikely to go down well with the promoters. Mr Maiya in the recent past has been quoted by the media that he was looking for a strategic investor rather than divesting a majority stake.The Maiya family controls 59% stake in the company directly and indirectly, with JP Morgan holding 26% stake. Another fund Acquarius holds 14-15%. MTR mops up its revenues from a portfolio comprising ready-to-eat, ready-to-cook, food ingredients and spices.
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