Prataap Snacks rises 10% as Authum Invt, Mahi Kela to acquire 47% stake

Authum Investment will acquire 42.31 per cent and Mahi Madhusudan Kela 4.54 per cent of the voting share capital in Prataap Snacks.

Prataap Snacks share price advanced as much as 10 per cent on Friday and registered an intraday high at Rs 1,156.55 per share on the BSE. The share however, pared gains later and was up barely 0.23 per cent at Rs 1,056.2 per share at 10:19 AM on the BSE.

By comparison, the BSE Sensex traded 0.12 per cent higher at 85,940.24 around the same time.

The rally came after the company announced signing a share purchase agreement with Authum Investment and Mahi Madhusudan Kela to acquire controlling stakes in the company.

As per the agreement, Authum Investment will acquire 102.48 million shares of Prataap Snacks, representing 42.31 per cent of the total equity, and Mahi Madhusudan Kela will acquire 1 million shares, representing 4.54 per cent of the voting share capital, at Rs 746 per share.

The share purchase agreement was signed after Authum Investment and Mahi Kela made an open offer to Prataap Sacks for acquiring up to 62,98,351 shares of the face value of Rs 5 representing 26 per cent of the voting share capital.

"Authum Investment & Infrastructure Limited (Acquirer) and Mahi Madhusudan Kela in her capacity as a person acting in concert with the Acquirer (PAC), have announced an open offer for the acquisition of up to 62,98,351 fully paid up equity shares of the face value of Rs 5 each from the Public Shareholders of the target company (Prataap Snacks), representing 26 per cent of the voting share capital," the filing read.

The acquisition was proposed at Rs 864 per share (the offer price), aggregating to a total consideration of up to Rs 5,44,17,75,264 or Rs 544.17 crore (assuming full acceptance) payable in cash.

As per Prataap Snacks' stock exchange filing, Peak XV Partners Growth Investment Holdings, Peak XV Partners Growth Investments II and Sequoia Capital GFIV Mauritius Investments will be selling their stakes in the company.

"Pursuant to the transaction, the Acquirer shall become the promoter of Prataap Snacks, while the PACs (if required under applicable law) will become members of the promoter group.

After the acquisition, the stakeholders do not have any intentions of delisting Prataap Snacks.

Prataap Snacks is an Indian snack food company, engaged in the manufacturing and marketing of multiple product variants like potato chips, extruded snacks, and 'Namkeen'. It sells products such as 'Foodchka', 'Mini Muska Bun', 'Masala Pipe', Stix', Cookie Cake', 'Centre-filled cup cake', 'Katori', and Tiffin Cake' under the 'Yellow Diamond' brand and 'Rich Feast' brand.

In January this year, reports had suggested that snacks maker 'Haldiram's' was in talks with Prataap Snacks to acquire a majority stake in the company.