Tata Sons to buy trusts’ shares in IHCL

Tata Sons Ltd has proposed to buy the entire stake of Tata Trusts in Indian Hotels Co, the owner of the Taj Group of hotels said in a filing to the stock exchanges on Tuesday.

As part of the proposed transaction, Tata Group’s holding company will buy the consolidated 6.64 per cent stake, or 78972460 shares, held by Sir Dorabji Tata Trust, Lady Memorial Tata Trust and Sir Ratan Tata Trust. The buyout, expected to be concluded by or on March 31, is part of restructuring the investment portfolio and simplifying the group structure.

The value of the deal would be computed based on the prevailing price on date of the proposed acquisition. The weighted average price of the shares is expected to be ~136.36 per share.

The acquisition price would not be higher by more than 25 per cent of the computed price, the company said in the filing. Tata Sons would need to pay between ~10.77 billion being the value at weighted average price and ~13.46 billion if it were to pay a 25 per cent premium. Indian Hotels on February 17 announced a comprehensive fiveyear business strategy to improve its EBIDTA margins by 8 per cent, the

PTI reported.

The company plans to restructure assets for “balance sheet optimisation” and simplify its holding structure for greater profitability under the plan, IHCL said in a statement. “Our strategy is three pronged: Restructure, Reengineer and Re-imagine our portfolio to achieve 8% point EBIDTA margin improvement,” IHCL’s MD and CEO Puneet Chhatwal had said.