Now, 11 companies in race for Pepe Jeans India
The fight to acquire the Indian arm of Pepe jeans is intensifying with about a dozen suitors in the fray including some big domestic retailers like Reliance Retail and Kishore Biyani’s Future Group besides various global private equity (PE) giants.
“There are multiple players looking to acquire Pepe,” according to a person with direct knowledge of the situation. Another person familiar with the development said there are 11 companies looking to snap up Pepe Jeans India, a fully owned subsidiary of Barcelona-based Pepe Jeans Group, which counts LVMH-owned L Catterton and Lebanese investment firm M1Group as majority shareholders.
A spokesperson for Pepe India declined comment while Future Group did not respond to an email seeking comments.
“As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis,” a Reliance Retail spokesperson said in an email response.
“We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges.” Kotak Group’s investment banking arm is advising Pepe’s global parent on the sell-off and has so far received 11 bids from potential buyers, one of the sources said.
Pepe, which operates more than 200 branded outlets in India — most of them franchisee run — was founded by Indianorigin siblings Arun, Nitin and Milan Shah in London in 1973, but has changed hands since. In February 2015, Pepe Jeans and Hackett London —both part of the Pepe Jeans Group —were bought by L Catterton and M1 from Torreal Funds, Arta Capital and L Capital Europe. Spanish entrepreneur Carlos Ortega owns 20% stake in the global clothing company where he is also the CEO.
Before Biyani’s Future Lifestyle entered the fray in October, ET had reported in March last year that five global funds, including KKR, Carlyle, General Atlantic and Malaysia’s sovereign fund Khazanah, had submitted non-binding offers for the company and conducted due diligence. Pepe’s owners at that time were seeking a valuation of Rs 2,000 crore for the Indian business. It is, however, unclear how many of the above mentioned PE players are still in the fray for Pepe.
While Future Lifestyle is looking to merge Pepe with its own Lee Cooper portfolio to create one of the country’s biggest casual wear brands, Reliance is adding muscle to its fashion portfolio for its sprawling retail business as well as its upcoming “new commerce” initiatives that seeks to merge offline retailing with an ambitious e-commerce venture.
Reliance fashion portfolio, spearheaded by Reliance Trends, has crossed Rs 10,000 crore in revenue in fiscal year 2018-19. In March, Reliance Retail announced that it had acquired John Players fashion and lifestyle brand from ITC.