The Hindu Business Line : UB Group looking to bid for SWC liquor biz; Jumbo unmoved

The UB group, which had earlier quashed talks about bidding, disclosed that its Chairman, Mr Vijay Mallya, had written to the Jumbo Group Chairperson, Ms Vidya Manohar Chhabria, that he would like to take part in the bidding.

In a swift reaction, the Jumbo Group stated that Mr Mallya had been told in no uncertain words that his bid would not be considered and there was no change in this regard.

Business Line on Wednesday reported that the Dubai-based Jumbo Group had mandated McKinsey Singapore to seek bids for its liquor business, the country's second largest after UB spirits division. The mandate from Jumbo to McKinsey also made it clear that no bids from arch rival UB Group or its Chairman Mr Mallya, would be entertained.

Mr Mallya's letter to Ms Chhabria assumes significance in this context.

"We have not bid yet, but we are likely to do it," a top UB official told this newspaper. "Mr Mallya has communicated to the Jumbo Group Chairperson that he should be let into the bidding process," the official said explaining the UB Group Chairman's letter calling for a fair process. He said UB had not yet received an information memorandum about the bid from McKinsey and was waiting for the same.

Reacting to the development, a Jumbo Group spokesperson said, "We are surprised to hear this. In fact, the Jumbo Group has written to UB saying that we don't wish to enter into any discussions with Mr Mallya." According to Jumbo sources, the reply by Mr P.M. Nene, Chief Financial Officer of Jumbo Group, was despatched hours after Mr Mallya's communication in the last week of October.

Mr Mallya's spirits empire, the world's fourth largest in terms of volume, recorded annual depletions of over 38 million cases in 2003-04, giving Mr Mallya an over 40 per cent share of the Indian-made foreign liquor market pegged at about 88 million cases.

Shaw Wallace's liquor business reported sales of 15 million cases.

A successful bid for the domestic arch rival will give Mr Mallya a stranglehold over the Indian market and will also catapult him to the second slot in the global listing of liquor companies by volume, surpassing Allied Domecq and Groupe Pernod Ricard.

Meanwhile, sources said the UB Group was looking at the possibility of structuring a joint bid with a foreign partner. They said Mr Mallya had held talks with a multinational rival in this regard even though there was no official confirmation of the same.

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