Talks still on with IDFC, exclusivity period has ended: R Thyagarajan

The IDFC deal will create a lot of value for shareholders. We are keen on pursuing it: R Thyagarajan

The Shriram Group and IDFC on Monday said they were calling off merger talks over differences in valuation, but R Thyagarajan, founder of the Shriram Group, says discussions will continue. In an interview with T E Narasimhan, he says only the exclusivity period has been terminated. Excerpts:

Why did the deal fall through?

There can be no one answer to it. It is a combination of reasons; it is not the one or the other. I would say there was no deal, so therefore, no deal fell through. All of us were attempting to build a deal and we found we were not able to do it within a time frame, which everybody thought was what we have given ourselves. 

What we had given ourselves was an exclusivity period. It means during the period of exclusivity, we will not talk to others on the same subject. Now we are confident that we are not going to discuss with many people. So there is no need for an exclusivity period. 

The exclusivity period raises all kinds of expectations, particularly from the media, as if something is going to happen. We have to rid ourselves of the exclusivity period and continue to talk.

So you will continue talks with IDFC?

We will, but there will be no timeline now. 

You will also be talking with others...

I do not think there is a possibility of talking with others, but we are not ruling it out. The IDFC deal will create a lot of value for shareholders. Therefore, we are keen on pursuing it. We do not see any other deal of this kind and we are not going in search of deals in the marketplace. But if an opportunity arises, we will look at it seriously and try to do something about it. 

IDFC has said Shriram did not respond to its offer...

What they mean is that if we would have replied they would have said, “No, this is not okay”. That is something like bargaining. That will continue, but it is not a reason for calling off the exclusivity period. I do not know in what context and form Rajiv Lall made that statement. Newspapers reported it; I do not go by them.

What are the reasons for calling off the exclusivity period?

They had a board meeting and they informed the board and closed it. If the board meeting had been scheduled after the end of the exclusivity period, probably it would have lapsed on its own. Since there was a board meeting, they might have discussed and concluded there was no point in having an exclusive period.

What is the current status of the talks then?

We are trying to communicate our perception to them and they are trying to communicate their perception to us. That will continue. Interaction among executives in both institutions will continue so that we understand each other. Managerially, it is a very complicated process. It cannot be described.

Is there a proposal to merge Shriram’s finance business with the Piramal Group’s business?

Mr (Ajay) Piramal himself has said no. But if you ask me, at the back of our mind, it is there. Merging with Piramal is not something we are discussing now. But suppose we have a brainwave, then we will start talking. Right now there is no brainwave. We are not thinking about it now, nor are they thinking about it.

How are all these discussions expected to affect Shriram’s business?

Almost all our time, energy and creativity are being applied to running our businesses. Nothing will change in the Shriram Group; it will continue to progress.