Blackstone Exits Haldiram's Stake Sale Over Valuation Dispute

Blackstone, the world's largest private equity firm, has withdrawn from the race to acquire a stake in Haldiram's, India's leading snack maker, due to a valuation mismatch with the Haldiram family, sources close to the matter said. The development comes as a setback to the family's plans to sell a significant stake in the company, which has been exploring strategic options for some time.

Blackstone, along with Abu Dhabi Investment Authority (ADIA) and Singapore's GIC, had submitted a non-binding bid for a majority stake in Haldiram's in May 2024, valuing the company at over $8 billion. However, the Haldiram family countered with a valuation of over $11 billion, leading to a stalemate in the negotiations.

Sources familiar with the matter said that Blackstone and its partners have made no further offers and are unlikely to do so unless the Haldiram family is willing to negotiate a lower valuation. The family, on the other hand, is undecided and has not yet engaged with other potential buyers, leaving the deal in limbo.

The withdrawal of Blackstone from the bidding process has opened up the competitive landscape for other interested parties. Bain Capital, which had earlier shown interest in acquiring a minority stake in Haldiram's, may now consider a majority stake. Temasek, the Singapore-based sovereign wealth fund, is also said to be exploring all options, including a minority stake. However, the Bain Capital-Temasek consortium is keen to explore all options, including a minority stake, and is not deterred by the family's high valuation demands.

The Haldiram family, which has been restructuring its business to demerge the FMCG and restaurant businesses into separate entities, is seeking to attract private equity investments and potentially debut on the stock market within the next 2-3 years. The family's restructuring plan, approved by the National Company Law Tribunal (NCLT), has unified its restaurant and snack businesses under a new entity, Haldiram Snacks Food Pvt Ltd (HSFPL).

Haldiram's, with its rich heritage and dominant position in the Indian snack market, has been diversifying its product portfolio and expanding its presence in international markets. The company's snack food business encompasses a diverse range of products, including snacks, namkeen, sweets, ready-to-eat and pre-mixed foods, cookies, non-carbonated ready-to-drink beverages, and pasta. Haldiram's has also been actively expanding its presence in retail supermarkets and quick-commerce platforms, aiming to compete with established players such as Britannia in cookies and Mondelez and Amul in chocolates.

The withdrawal of Blackstone from the Haldiram's stake sale process highlights the challenges faced by private equity firms in acquiring controlling stakes in family-owned businesses, particularly when there is a significant valuation gap. As the deal remains uncertain, other interested parties may now have the opportunity to step in and potentially secure a controlling stake in the company. However, the Haldiram family's high valuation demands may continue to pose a hurdle for potential buyers.