Future Retail signs SPA for Hypercity Retail's Rs 655 cr acquisition

Future Retail on Monday said it has executed share purchase agreement (SPA) with Shoppers Stop for its Rs 655-crore acquisition of Hypercity Retail in stock-and-cash deal.

Last week, Kishore Biyani-led Future Retail Ltd(FRL)had announced that it would acquire Hypercity that operates 19 large format premium stores in some key cities from the K Raheja group firm Shoppers Stop.

"The company has executed the SPA with sellers and Hypercity Retail India Ltd (HRIL) on October 8, 2017 for acquisition of the entire share capital," FRL said in a BSE filing.

Shopper Stop owns 51.09 per cent stake in HRIL and rest is owned by the promoter group and others.

Future Retail further said the deal would be "subject to receipt of approval of shareholders of the company and receipt of requisite regulatory and other approvals".

In a separate filing, Shoppers Stop said the SPA was executed on October 8, 2017.

"The consideration would be paid by issue and allotment of 47.56 lakh equity shares of Rs 2 each of Future Retail as share consideration and Rs 79.18 crore as cash consideration," Shoppers Stop informed.

The loss-making Hypercity, majority owned by Shoppers Stop, had a turnover of Rs 1,191 crore in 2016-17 fiscal.

According to Future Retail group, the acquisition "would result in further consolidation of retail business of FRL and would increase footfall of FRL in Hypermarket segment."

On October 5, the board of both companies decided on the transaction and according to the term sheet, FRL will allot 93.1 lakh shares with a face value of Rs 2 each to Hypercity promoters, aggregating to Rs 500 crore, on a preferential basis, FRL said in an exchange filing.

The preferential allotment will be made at a premium of Rs 535 per share and the remaining Rs 155 crore will be made upfront in cash.

On completion of the transaction, Hypercity will become a wholly-owned subsidiary of FRL.

Under the deal, the promoters of Hypercity - Shoppers Stop, RC Raheja and his family, CL Raheja and family, Jyoti C Raheja along with Chandru L Raheja and NC Raheja and family and B S Nagesh and family - will exit the company.