Future Value Retail to merge with Pantaloon Retail

The company,however,did not share details of the proposed merger.

Future Value Retail operates 148 Big Bazaar and 169 Food Bazaar stores,among other formats,in over 70 cities across the country,according to its website. It also runs another retail brand KB8217;s Fairprice.

In a filing to the BSE,PRIL also said it will demerge business undertaking,comprising all business,activities and operations pertaining to the Pantaloons Format Business of the company and transfer to Peter England Fashions and Retail Ltd PEFRL by way of a scheme of arrangement.

The shares of PRIL were trading 4.25 per cent up at Rs 149.65 apiece on BSE during afternoon.

Yesterday,Aditya Birla group firm PEFRL8217;s board had approved the demerger of Pantaloon format business and fixed the share swap ratio at 1:5 8212; meaning for every five shares of Pantaloon,the shareholders will get one Peter England share.

Under the transaction,PRIL will also transfer all undertakings,business,activities and operations pertaining to the 8216;Pantaloons Format8217; business to Peter England. Besides,a debt of Rs 1,600 crore will be transferred to PEFRL. The date of transfer has been fixed at July 1,2012.

As part of the Scheme,Aditya Birla Nuvo Ltd ABNL and/or its affiliates intend to make a voluntary open offer to other shareholders of PEFRL.

These developments mark a step closer towards Aditya Birla Group8217;s proposed acquisition of majority stake in Kishore Biyani-led group8217;s flagship Pantaloon format apparel retail business unit.

Post-demerger,the holding of ABNL in PRIL through its subsidiary PEFRL,will be 50.09 per cent.

In April,Future Group gave away majority control of Pantaloon to ABNL for a total consideration of Rs 1,600 crore.

The group,laden with an estimated consolidated debt of Rs 6,000 crore,was understood to have finalised plans to exit from stationery joint venture with US-based Staples by selling its entire stake to the partner for up to Rs 170 crore.

It is also mulling stake sale in Future Generali Insurance,a JV with Italian insurer Generali Group.

The group may hive off part of its 70 per cent stake in Future Supply Chain FSC,a supply management firm. The remaining 30 per cent is held by Hong Kong-based Li amp; Fung,which is also interested in hiking its stake in the company.

In June,the group had sold majority stake in Future Capital Holdings to private equity firm Warburg Pincus for Rs 560 crore.