Trent shares surged 18% during early trade Wednesday following news of UK-based Tesco buying 50% stake in Trent Hypermarkets through FDI route
Trent Ltd (Trent) surged 18% during early trade Wednesday on the news of Tesco PLC (Tesco), United Kingdom’s largest retailer, planning to buy 50% stake in the company’s unit. Trent Hypermarket Ltd (THL) is wholly owned subsidiary of Trent that operates retail business under the name of ‘Star Bazaar’.
No financial details were provided, but quoting an official at Indian trade ministry, Reuters, said, “Tesco has made an application to India's Foreign Investment Promotion Board (FIPB) and plans to invest $110 million.
Share price of Trent has been moving higher, especially over the past two months, it is witnessed higher trends. Between 3rd November to 17th December, Trent increased 15.8% to Rs1066.6.
Caption: Trent (Share Prices of November 2013 – December 2013)
“We believe that our understanding of the Indian Market coupled with Tesco’s unparalleled global retail expertise will allow us to leverage the tremendous potential of the market to the benefit of all the stakeholders,” said Noel Tata, vice chairman of Trent Ltd, in a press release.
In a regulatory filing, Trent said Tesco is in the process of making an application to the FIPB with respect to the proposed investment. Tesco will enter into the partnership with 50% stake in THL, subject to FIPB approval.
“THL currently operates 16 stores across the southern and western regions of India. The proposed partnership will operate and build on the existing portfolio of Star Bazaar stores in Maharashtra and Karnataka. The application envisages a minimum FDI in line with the application multi brand retail trading policy,” said THL in a press release.
Trent closed Wednesday 10.7% higher at Rs1181 on the BSE, while the Sensex ended 1.2% up 20,859.
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