No formal proposal yet from SP group on separation, says Tata Sons

A corporate lawyer said both parties do not have any other option but to negotiate
Shapoorji Pallonji (SP) Group, which owns 18.5 per cent stake in Tata Sons, has not sent any formal request to separate from Tata Group, the latter said on Thursday. 

“After the Supreme Court (SC) order on September 22 disallowing SP Group to pledge any Tata Sons shares, SP Group issued a statement that day stating its desire to separate from Tata Group. This statement resulted in considerable confusion and speculation in the media,” said Tata Sons. 

Tata Group states it has to date not received any formal request or proposal from SP Group on this. Since the matter is sub-judice before the SC, Tata Sons will wait for the court proceedings to resume, which are scheduled for October 28,” clarified the statement from Tata Sons.

This is not the first time Tata Group has reiterated its stand that it would respond only in court, leading to a settlement deadlock between the two parties. On September 22, SP Group had told the SC it was ready to sell its stake in Tata Sons, provided it got an early, fair, and equitable solution. In a statement soon after, SP Group said the separation from Tata Group was necessary due to the potential impact this continuing litigation could have on the livelihoods and the economy. 

SP Group has pegged the valuation of its Tata Sons stake at Rs 1.78 trillion. Tata Group has not given any statement on the valuation. 

The 27-per cent rise in Tata Consultancy Services shares and a probable valuation of a SuperApp (developed by Tata Sons) have added more value to stake held by Tata Sons. 

A corporate lawyer said the firm now does not have an option but to negotiate.

According to the articles of association (AoA), Tata Sons has the first right of refusal so any proposal for shares changing hands would first need to come to the board of Tata Sons. SP Group owns 18.37 per cent in Tata Sons, while the majority 66 per cent is controlled by Tata Trusts. While the total m-cap of 17 listed entities of the Tata Group amounts to Rs 12.96 trillion, the valuation of SP Group’s holdings in listed entities of Tata group companies comes to around Rs 1.48 trillion.

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