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As per the articles of association (AoA), Tata Sons have the first right of refusal so any proposal for shares changing hands would first need to come to the board of Tata Sons. (MINT_PRINT)
As per the articles of association (AoA), Tata Sons have the first right of refusal so any proposal for shares changing hands would first need to come to the board of Tata Sons. (MINT_PRINT)

Tata Sons hints at court monitored separation with Mistry family

In a statement on Thursday even Tata Sons indicated that planned separation in all likelihood will be a court monitored process as it has till date not received any formal request or proposal from the SP group on this matter

Mumbai: Tata Sons Limited on Thursday is yet to receive a formal notice of separation from Shapoorji Pallonji ( SP) group, which has recently announced its decision to end its 70-year association with the Tatas after relations soured between the two sides in 2016. In a statement on Thursday even Tata Sons indicated that planned separation in all likelihood will be a court monitored process as it has till date not received any formal request or proposal from the SP group on this matter.

"Tata Group states that they have till date not received any formal request or proposal from the SP group on this matter. In any event, since the matter is sub judice before the Hon’ble Supreme Court, Tata Sons will wait for the court proceedings to resume, which are scheduled for October 28th" the statement said. "In any event, since the matter is sub judice before the Hon’ble Supreme Court, Tata Sons will wait for the court proceedings to resume," the company added.

Mint had reported on september 29, that the Mistry family is expected to share the details of the offer in the Supreme Court, making it a part of the plea for relief it is seeking from the court in a minority shareholder oppression case, the people said on condition of anonymity. The next hearing of the case is scheduled on 28 October. The separation plan will offer the Tata group easy terms, including the option to stagger payments, to help India’s largest conglomerate buy out the Mistry family’s 1.5 trillion stake in Tata Sons Ltd and end a festering feud between the groups that were once close allies, Mint had reported citing two people directly aware of the matter

As per the articles of association (AoA), Tata Sons have the first right of refusal so any proposal for shares changing hands would first need to come to the board of Tata Sons. Mint had also reported on October 9 that Tata Sons Ltd may offer as much as $3 billion ( 21,900 crore) to buy a part of the Mistry family’s 18.4% stake in the Tata group holding company, two people aware of the matter said. A major part of the funds needed by Tata Sons has been arranged, with unit Tata Consultancy Services Ltd, in which the parent owns a 72% stake, announcing a buyback of shares. Tata Sons is expected to get up to 11,528 crore from the share buyback.

While the Mistry family is not against selling the stake in a staggered manner, their final decision will depend on the valuation offered by Tata Sons, which is expected to factor in a holding company or conglomerate discount.

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