Tatas sell 34% Barista stake to Sterling
group-
Barista becomes a 100% subsidiary of the Sterling group (NRI).
OUR BUREAUS
Posted online: Tuesday, December 07, 2004 at 0000 hours IST
BANGALORE/CHENNAI, DEC 6, 2004
The Financial Express
Ending year-long media speculation, Tata Coffee on Monday said it has
sold its entire 34.31% stake in the leading coffee pub chain Barista
to Sterling Infotech which is controlled by NRI businessman C Sivasankaran.
With this acquisition, Barista becomes a 100% subsidiary of the Sterling
group.
The exit of the Tatas from Barista did not catch anybody
by surprise as it was considered a fait accompli ever since the Sterling
group bought out over a 65% stake in the coffee pub chain from Turner
Morrison in April this year. Both Tata Coffee and Sterling group sources
declined to reveal the size of the deal.
According to highly placed sources in Tata Coffee, the
exit has been in the offing for the past few months and talks were on
with the Sterling group to get a right price. The deal was
struck by both sides on Monday, they added. However, they declined to
give details on the size of the deal citing secrecy clauses in the stock
sale agreement.
Meanwhile, on The Stock Exchange, Mumbai (BSE), the Tata
Coffee stock was locked at the 10% upper circuit at Rs 298.4 after the
companys announcement of its decision to exit its investment in
Barista.
In 2001, Tata Coffee had bought the 34.31% stake in Barista
from Turner Morrison for Rs 26 crore at a time when Barista was valued
at Rs 100 crore.
A senior Sterling group official also told FE that the
stock sale agreement was finalised and sealed by both sides on Monday.
We havent done any valuation for the Barista brand. I am
unable to disclose the financial details of the deal, the official
said.
However, the official added the first priority of the
Sterling group would be to enhance the reach of Barista coffee pubs
by increasing the current number of 102 outlets. Tata Coffee had originally
entered the coffee pub chain with an eye to getting into the front
end of the coffee business, but had developed cold feet later,
industry sources say