By Ratna Bhushan | 22 September 2014, 7:07 AM IST
NEW DELHI: McDonald's estranged joint venture partner Vikram Bakshi has offered to sell his 50% equity in the joint venture firm Connaught Plaza Restaurants, back to the US burger and fries chain for Rs 2,500 crore and put an end to their legal tussle, two people aware of the developments said.
"The valuation of Rs 2,500 crore is market-related. Bakshi wants to use the stock market value of Westlife Development, which runs McDonald's outlets in the west and south through its subsidiary Hardcastle Restaurants, as a benchmark if he were to finally exit the joint venture," one of them said. "The valuation of Westlife is around Rs 5,000 crore, so 50% of CPRL (Connaught Plaza Restaurants) would be Rs 2,500 crore, given that the businesses are largely the same."
This person said that even if McDonald doesn't agree to pay Rs 2,500 crore, discussions may lead to an amount that could be 20% lower. CPRL operates McDonald's outlets in north and east India.
The other official said Bakshi has informally communicated the valuation to McDonald's.
The offer to exit was also communicated during the ongoing Company Law Board proceedings between the two, where Bakshi alleged that the US major did not treat him equally while giving preferential treatment to its other partner in India Westlife.
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"The valuation of Rs 2,500 crore is market-related. Bakshi wants to use the stock market value of Westlife Development, which runs McDonald's outlets in the west and south through its subsidiary Hardcastle Restaurants, as a benchmark if he were to finally exit the joint venture," one of them said. "The valuation of Westlife is around Rs 5,000 crore, so 50% of CPRL (Connaught Plaza Restaurants) would be Rs 2,500 crore, given that the businesses are largely the same."
This person said that even if McDonald doesn't agree to pay Rs 2,500 crore, discussions may lead to an amount that could be 20% lower. CPRL operates McDonald's outlets in north and east India.The other official said Bakshi has informally communicated the valuation to McDonald's.
The offer to exit was also communicated during the ongoing Company Law Board proceedings between the two, where Bakshi alleged that the US major did not treat him equally while giving preferential treatment to its other partner in India Westlife.
read more
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