RIL's initial bid for Metro Cash & Carry India at Rs 5,600 crore: Report

Thailand's CP Group has placed a bid of about Rs 8,000 crore, or $1 billion, to acquire Metro Cash & Carry India

Mukesh Ambani-owned Reliance Retail has submitted a non-binding bid of about Rs 5,600 crore to acquire Metro Cash and Carry's operations in India, reported The Economic Times on Monday, quoting industry executives aware of the development. 

 

To acquire Metro Cash and Carry's India operations, which is up for sale, Reliance Retail is in the race with Thailand's largest conglomerate, Charoen Pokphand (CP) Group, and PE firm Lightspeed Venture Partners. 

 

CP Group has placed a bid of about Rs 8,000 crore, or $1 billion, nearly the German firm's expectations. 

 

Two weeks ago, Metro India in Bengaluru gave detailed presentations on the performance and growth potential of the firm to senior teams from the CP Group and Reliance Retail, reported ET citing people aware of the matter.

 

"We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges," a Reliance spokesperson told ET.

Also read: RIL AGM 2022: Ambani to unveil 5G phone, spell out new, bigger energy plans

 

Meanwhile, German AF is concerned about Sebi's regulations and the "swadeshi versus videshi" debate in India, a person aware of the matter told ET. 

 

Lobby groups representing Indian retail firms have upped the ante against overseas retailers, alleging foreign direct investment (FDI) norms violation, which the foreign companies have consistently denied.

 

"Against this background, Reliance has an edge over others because it is the only Indian company serious about buying Metro India. Thailand's CP Group is also hugely interested because it already has a presence in India through Lots Wholesale outlets," one of the persons told the business daily.

 

Metro AG has asked merchant bankers J P Morgan and Goldman Sachs, valued the firm's business in India at about $1 billion, to identify prospective investors.

 

Final bids for the acquisitions are expected to be submitted in a month, during which the bid amount can change, industry experts told ET. 

 

JP Morgan and Goldman Sachs are the merchant bankers of Metro Cash and Carry India, which has valued the business at about $1 billion. Final, binding bids are likely to be submitted within a month, during which, according to some industry experts, the bid amount could change.

 

Metro Cash and Carry India posted an Ebitda of Rs 118 crore in FY21 on sales of Rs 6503 crore, with a gross profit of Rs 725 crore, which is 11.14 per cent on its sales.