Amazon stake buy fails to boost Future Retail

Shares of Future Retail were trading lower, amid a weak broad market, despite the company announcing that Amazon is acquiring 49% stake in Future Coupons.

Meanwhile, the S&P BSE Sensex was down 239 points or 0.65% to 36,234.21.

Future Retail said that Kishore Biyani, on behalf of the existing shareholders forming part of the promoter group and Future Coupons (promoters), entered into a share subscription agreement and a shareholders' agreement with Amazon.Com NV Investment Holdings LLC (Amazon). The announcement was made after market hours yesterday, 22 August 2019.

The Future Retail stock is trading lower by 3.70% at Rs 398.15. It hit a high of Rs 424.3 and a low of Rs 415 so far during the day. On the BSE, 1.27 lakh shares were traded in the counter so far, higher than its average daily volumes of 43,507 shares in the past one quarter.

As part of the agreement, Amazon has been granted a call option. This call option allows Amazon to acquire all or part of the Promoters' shareholding in Future Retail (Company), and is exercisable between the third to tenth years, in certain circumstances, subject to applicable law.

The Promoters have also agreed to certain share transfer restrictions on their shares in the company for same tenure, including restrictions to not transfer shares to specified persons, a right of first offer in favour of Amazon, all of which are subject to mutually agreed exceptions (such as liquidity allowances and affiliate transfers).

Future Retail operates some of India's most popular retail chains that inspires trust through innovative offerings, quality products and affordable prices. Big Bazaar, the company's flagship chain is regularly ranked among the most trusted retail brands in the country. The firm's small store neighborhood retail chains, EasyDay and Heritage Fresh, operates closer home to customers and offers member-customers a range of services.

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