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Italy's Lavazza to buy Barista
Kausik Datta in Mumbai | March 09, 2007 18:20 IST
Italian coffee chain Lavazza is close to acquiring Barista. An announcement to this effect is expected shortly.
Sources close to the development said Lavazza would acquire the majority stake in Barista from ace investor C Sivasankaran. Siva, as he is popularly known, had bought 65 per cent in Barista from the Amit Judge-controlled Turner Morrison 3 years ago, and later also bought the Tata Group's 35 per cent stake. His Sterling Group was learnt to have paid nearly Rs 65 crore (Rs 650 million) for the acquisition of 100 per cent in Barista.
Standard Chartered Bank is advising Sivasankaran while Lazard is Lavazza's advisor.The exact size of the deal could not be ascertained. Industry sources, however, said Sivasankaran, who has perhaps never lost money in a stake sale except in the sale of his 10 per cent in Bharti Telecom back to Sunil Mittal, would extract a handsome premium from this deal as well.
Although financial details regarding the closely held coffee chain were not available, industry sources said it had posted sales of around Rs 45 crore (Rs 450 million) last year.Coffee chain business is becoming competitive in India. Sequoia Capital India had invested Rs 90 crore (Rs 900 million) in Amalgamated Coffee Bean Trading, the owners of Cafe Coffee Day. Starbucks is likely to join hands with Planet Retail, part of the Pantaloon group, for its India entry.