In a significant move, Blackstone Inc has intensified its bid for Haldiram’s, one of India’s most beloved fast-food chains. This enhanced offer is set to revolutionize the private equity firm’s entry into the booming Indian snacks market. The buyout fund, in collaboration with a consortium of investors, is expected to bid around Rs 40,000 crore for a 51% stake in Haldiram’s, valuing the company between Rs 70,000 and 78,000 crore.
Details of the Proposed Deal
The proposed deal, contingent on the successful completion of the due diligence process, would grant Blackstone control over Haldiram’s product business. This includes a perpetual license for Blackstone, ensuring long-term control and profits. Notably, the ownership of Haldiram’s restaurants and brand license, initially contentious issues, have been resolved, allowing the deal to progress smoothly.
Valuation and Strategic Implications
The valuation of Haldiram’s at Rs 70,000 to 78,000 crore highlights the significant market potential and brand value of the iconic fast-food chain. The resolution of key issues, such as restaurant ownership and brand rights, means that the Haldiram family will retain control over restaurant operations and receive annual royalties from the new owners for using the Haldiram’s brand.
Consortium and Due Diligence
EY is conducting the due diligence on Haldiram’s on behalf of Blackstone, with Singapore’s GIC and Abu Dhabi Investment Authority also part of the investor consortium. Despite initial valuation mismatches, discussions have moved forward, with a spokesperson for Blackstone confirming that they had submitted an initial proposal in May 2024. Haldiram’s CEO, Krishan Kumar Chutani, has refrained from commenting on the ongoing negotiations.
Market Dynamics and Future Prospects
Haldiram’s has been in discussions with potential buyers since September 2023. The protracted transaction process has led to speculation about a possible public listing of Haldiram’s shares. Earlier this year, other major players like Singapore’s Temasek and Bain also expressed interest in acquiring the 87-year-old sweets and snacks manufacturer.
Conclusion: A Landmark Deal in the Making
As the talks with Blackstone near finality, the potential valuation of Rs 78,000 crore for a 51% stake represents the best offer received to date. With due diligence underway, industry insiders expect a binding term sheet to be finalized within the next 6-8 weeks. This landmark deal could significantly reshape the landscape of India’s fast-food and snacks market, solidifying Blackstone’s presence in the industry.
