In a BSE filing, Future Retail stated that the acquisition will be done through a combination of shares and cash. Future Retail will allot 9.3 mn shares (FV of Rs 2) to Hypercity Retail’s shareholders at Rs 535 per share on a preferential basis totaling Rs 500 cr and Rs 155 cr will be paid in cash.
Hypercity is a loss-making entity with a net loss of Rs 84 Cr in FY17. The turnover and net worth of the Hypercity, a premium chain of 19 hypermarkets, was Rs 1,191 Cr and Rs 11.4 Cr respectively as on FY17. The enterprise value of Hypercity is Rs 911 Cr.
Post acquisition, HyperCity will become a wholly-owned subsidiary of Future Retail. The acquisition is in line with Future Retail’s strategy to expand its chain of hypermarket stores to 350 in the next 3-5 years.
Shoppers Stop Ltd is currently trading at Rs 513.35, up by Rs 6.2 or 1.22% from its previous closing of Rs 507.15 on the BSE. The stock is currently trading above its 50 DMA.
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