The Hindu Business Line : Tata Tea eyes stake in Mount Everest?

Mumbai May 31 Reports that Tata Tea might pick up significant stake in Mount Everest Mineral Water, makers of the Himalayan brand of mineral water, sent the shares of both the companies soaring on the exchanges on Thursday.

Tata Tea gained Rs 44.30 or 5.05 per cent on the BSE to close at Rs 921.

Mount Everest gained by Rs 6.05 or 4.98 per cent to close at Rs 127.65.

The reports were met with official silence from the Tatas.

"We do not comment on speculation," said a spokesperson for the group, adding that this was a "silent period" for the company.

(The board of Tata Tea meets on Friday to consider the financial results of the company).

Just a week back, the country's largest tea producer emerged triumphant from its investment in US health drinks maker Glaceau, selling 30 per cent stake acquired just nine months ago to Coca Cola, pocketing a profit of around Rs 2,000 crore in the process.

At the time of its picking up the Glaceau stake, the market had reacted negatively to the news. But it appears to have greeted news of the domestic acquisition positively.

When Tata Tea acquired stake in Glaceau, it was with the purported view to gain a foothold in the North American market, to enter the burgeoning health drinks sector.

With Mount Everest, it would be taking a tentative step in the "health drinks" direction in the domestic market.

The company has already introduced green teas.

Speculation has it that Mount Everest might agree to a preferential allotment to Tata Tea.

Mount Everest is part of the Dadi group of companies, chaired by Dr Dadi Balsara.

The company claims that Himalayan is graded equivalent to `Evian' and `Vittal' from France.

For the nine months ended December 2006, the company reported net profit of Rs 1.16 crore and net sales of Rs 17.7 crore. The annualised third-quarter EPS works out to 45 paise.

More Stories on : Water | Mergers & Acquisitions | Stocks | Tata Tea Ltd | Tea

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