BENGALURU (Reuters) – Shares of Lotus Chocolate Co rose 5% on Friday, a day after a unit of Reliance Retail Ventures agreed to buy a majority stake in the Indian chocolate maker for 740 million rupees ($8.94 million).
Reliance Consumer Products Limited (RCPL), the fast-moving consumer goods arm of Reliance Retail, will acquire a 51% stake from promoters at 113 rupees a share and will also subscribe to some non-noncumulative redeemable preference shares.
RCPL would also make an open offer to acquire 26% from public shareholders of Lotus.
The per-share value represents a discount of 3.5% to Thursday’s closing price of 117.10 rupees.
The stock hit an upper circuit for a fifth straight session on Friday, having gained 27.5% so far this week.
Reliance Industries, led by Indian billionaire Mukesh Ambani, has diversified from its mainstay oil-to-chemical business with a strong focus on retail and telecom.
Reliance Retail, currently India’s biggest retailer, had this year set out plans to acquire dozens of small grocery and non-food brands, as it aims to build its own $6.5 billion consumer goods business to challenge foreign giants like Unilever and Nestle.
Shares of Lotus, which began operations in 1992 and makes chocolates, cocoa products and cocoa derivatives, are up 5.7% so far this year.
($1 = 82.7580 Indian rupees)
(Reporting by Nallur Sethuraman in Bengaluru; Editing by Eileen Soreng)
