Future Retail to acquire HyperCity of Shoppers Stop, share prices surge  

Kishore Biyani’s Future Retail announced on Thursday that the retailing major will be acquiring Shoppers Stop’s loss making retail chain HyperCity for Rs 655 crore. The acquisition that will take place in part cash and part stock deal will make HyperCity Retail India a wholly owned subsidiary of Future Retail.

According to the company’s filing, Future Retail will be allotting 9.310 million shares of Rs 2 face value to HyperCity Retail’s 15 shareholders at Rs 535 per share on preferential basis, summing up to a total deal value of Rs 500 crore that will come from these shares while the remaining Rs 155 crore will be paid in cash.

The deal will be the retail major Future Retail’s fifth major acquisition over the past four years. The other acquired brands of the company include Bharat Retail, Big Apple, Heritage Fresh and Nilgiris.   However, the deal concerning HyperCity is further subjected to the approval of the shareholders of Shoppers Stop.      

Both the shares of Future Retail and Shoppers Stop shot up by 6-9 per cent in the early trade on Friday as investors welcomed the company’s decision to buy HyperCity. Future Retail was also witnessing a spurt in volume by more than 1.92 times and hit an intraday high of Rs 559 per share on BSE. While Shoppers Stop hit its 52 week high of Rs 552.40 per share in Friday’s trade on BSE.