Energizer Holdings and Warren Buffett's Berkshire Hathaway-owned Duracell have come
face to face to in a battle to grab a controlling stake in battery manufacturer Eveready Industries Ltd. Energizer already owns the Eveready brand in the US and China. The US-based rivals are
not alone in the race for BM Khaitan's flagship company and some private equity firms such
as Blackstone, KKR and Kedaara too are expected to submit their bids.
All non-binding bids for the dry cell major are expected to be submitted this week. The
selected candidates will start due diligence and submit binding bids for the company.
Eveready, the largest selling brand of dry cells in the country, is part of the diversified
Williamson Magor group, which has interests in tea plantations, engineering and consumer
goods.
The promoter family, which holds around 45 percent stake in the publicly listed company, has
appointed Kotak Mahindra bank to run a formal auction for the sale. The transaction is likely
to trigger an open offer for an additional 26 percent of the company. Khaitans had acquired the
stake in the Kolkata-based company from Union Carbide India for 3 billion rupees in 1993.
Besides dry cells, the company also sells flashlights, packaged tea, led lights, electrical
appliances and confectionery. The sale is primarily aimed at paring some of the 10-billion-
rupee debt at the group level. The promoter family may also decide to hold a 10-15 percent stake
in the company after the sale, according to a report in The Economic Times.
Bid to reduce debt
The Khaitan family has been trying to reduce the debt burden for a while now. Recently, the
promoters had also sold around 20 tea estates of group company McLeod Russel, the
largest bulk tea producer in the world, to reduce debt and grow in the packet-tea segment.
"There is significant traction for the asset for its scale and brand equity. Expect a 30-40%
control premium to the current market price," an unnamed executive told the newspaper. In
2017-18, the company had reported a net profit of 547.4 million rupees on net sales of 14.5
billion rupees. Shares of Eveready have rallied over 14 percent since the news became public in
January. As of 1433 IST, shares of the company were down 4.3 percent at 199.45 rupees, giving the company a market capitalisation of 14.6 billion rupees.
