Aditya Birla Nuvo Ltd today said that it will approach the Competition Commission of India (CCI) again with final details of its proposed takeover of Pantaloon retail business from Future Group.
“Pantaloon Retail and Aditya Birla Nuvo Ltd are committed to giving effect to the memorandum of understanding and are in the process of finalising certain details of the transaction and the scheme of arrangement.
“Once the application is re-submitted with requisite information, the CCI will consider the proposed acquisition as per its procedures and policies,” the two companies said in a joint statement.
The statement comes after the CCI said that the earlier application from Kumar Mangalam Birla-led group firm and Pantaloon Retail was not valid, as the proposed transaction was yet to be approved by the boards of the concerned companies.
Clarifying that the competition panel has not rejected the transaction as such, the two companies said that the CCI “in its order released yesterday noted that the merger notification made by the parties on the basis of the memorandum of understanding signed between them on June 14, 2012 was premature...”
In its order, the CCI has also noted that “it would require copies of the final board approval and scheme of arrangement for the demerger in order for it to evaluate transaction,” the joint statement said.
The order, dated August 14, 20112, was released by the CCI late last night.
Aditya Birla Nuvo Ltd, through a subsidiary, has proposed to acquire a majority stake in Pantaloon retail format business from Kishore Biyani-led Future group and the concerned parties had sought CCI clearance for the deal on July 16.
Both entities, according to the CCI, had sought approval based on their MoU for the proposed deal. However, the CCI rules require applications to be made after the boards of the concerned companies’ approval for the final deal.
CCI said the companies were yet to finalise the exact scope of the assets to be acquired and the share entitlement ratio, while terms of the deal were subject to certain definitive documents that are to be executed.
“It is also observed from the terms and conditions in the MoU, that the said MoU is an interim arrangement since it will terminate immediately on execution of the implementation agreement or if the scheme does not get approval from the board of directors of the respective parties,” it said.
In late April, Future Group had said that Aditya Birla Nuvo would infuse Rs 1,600 crore into its flagship ‘Pantaloon’ and would acquire a majority stake in the store chain, which would be later demerged to be listed as a separate entity.
As a part of the deal between the two companies, the Pantaloon format would be demerged from PRIL.