It now appears that there may be a cloud over Kishore Biyani’s distress sale of Future Retail to Reliance Retail.
Amazon has an extremely strong case on 2 fronts - they have a right of first refusal which Biyani didn’t honor, plus they have an explicit black-listing of any transaction with Reliance Retail.
So irrespective of what happens with Future Retail, it is highly unlikely that Reliance Retail will be able to buy it on the cheap.
My guess is that Amazon is not going to let this slip easily - and they will ensure that Biyani pays a price for ignoring Amazon’s overtures.
This is likely to end with status quo ante for Reliance Retail, and a huge loss for Kishore Biyani. Amazon may not explicitly benefit from this - except to extent of preventing the sale to Reliance Retail.
But there are some interesting tidbits that are coming out in court. Amazon’s cosy relationship with Narayanamurthy’s Catamaran on Cloudtail to bypass foreign restrictions is already well known. Now it seems like they also have a willing partner in Premji Invest - to buy Future Retailing on the cheap.
I don’t think Mukesh Ambani will take this lying down - so expect some attention on Catamaran and Premji Invest’s willful bypassing of foreign restrictions on retail in coming future.
But in short term, this is a negative for markets, and this sort of confusion is probably not the best thing for Reliance and Future retailing, right at the start of the festival shopping season!
Amazon has an extremely strong case on 2 fronts - they have a right of first refusal which Biyani didn’t honor, plus they have an explicit black-listing of any transaction with Reliance Retail.
So irrespective of what happens with Future Retail, it is highly unlikely that Reliance Retail will be able to buy it on the cheap.
My guess is that Amazon is not going to let this slip easily - and they will ensure that Biyani pays a price for ignoring Amazon’s overtures.
This is likely to end with status quo ante for Reliance Retail, and a huge loss for Kishore Biyani. Amazon may not explicitly benefit from this - except to extent of preventing the sale to Reliance Retail.
But there are some interesting tidbits that are coming out in court. Amazon’s cosy relationship with Narayanamurthy’s Catamaran on Cloudtail to bypass foreign restrictions is already well known. Now it seems like they also have a willing partner in Premji Invest - to buy Future Retailing on the cheap.
I don’t think Mukesh Ambani will take this lying down - so expect some attention on Catamaran and Premji Invest’s willful bypassing of foreign restrictions on retail in coming future.
But in short term, this is a negative for markets, and this sort of confusion is probably not the best thing for Reliance and Future retailing, right at the start of the festival shopping season!