Biyani in final stages of Spykar deal

Wednesday, 20 February 2013

It’s official now… Future Group founder Kishore Biyani is eyeing a stake in Spykar and talks are said to be in the final stages between both the parties. Media reports suggests, Biyani's investment company Future Ventures is all set to buy out Spykar Lifestyle in an all-cash or part cash and stock deal.

For the Future Group, which has already been busy restructuring its fashion business after selling majority stake in Pantaloons to Aditya Birla Nuvo last year, Spykar acquisition would grow group’s fashion business into a billion dollar unit within two years. Apart from Spykar, Biyani is also close to sealing deals with a French kids’ wear brand and two other niche Indian players in women’s wear and footwear segments.

As per plan, Biyani is looking at demerging fashion, foods and FMCG, hypermarkets and supermarkets into three separate entities. Future Lifestyle Fashion will consolidate the group’s fashion portfolio and will be listed on the bourses by June this year.

Repeated attempts to get in touch with Future Group were futile. However, Sanjay Vakharia, CEO Spykar Lifestyle, said he was not privy to this issue and refused to give any comments. Earlier it was reported that Spencer’s Retail, the flagship company of RP-Sanjiv Goenka Group had joined the race to acquire the biggest domestic denim player. The 2003-formed PE fund manager had begun talks with various investment bankers for giving a sell mandate. Avigo is also looking for an enterprise value of Rs 350-400 crores for Spykar. Last year, Avigo had taken over the reins from the promoter after roping in its global investor, Metmin Investments, to acquire 30 per cent stake in Spykar by pumping in Rs 30 crores. Metmin Investments is owned by NRI tycoon Raj Bagri, who was the chairman of London Metal Exchange. In 2007, Avigo had invested about Rs 25 crores in Spykar.

Sources say, apart from the Sanjiv Goenka group, Aditya Birla Group was also in discussions for acquiring the deal to expand its retail brand portfolio. Apart from these two companies, two PE funds, Everstone Capital and India Value Fund Advisors, have also shown their interest in Avigo’s stake.

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