With interest rates at record lows, and nearly $1.6 trillion of pent-up cash, 2021 could witness a spate of leveraged buyouts, according to a recent Bloomberg report.

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While India hasn’t been an active participant in the global surges of LBOs, there have been some memorable attempts, none more spectacular than the one that shook up the relatively staid world of Indian business in 1985.

Four years before the infamous LBO of RJR Nabisco, a deal that inspired the book Barbarians at the Gate, India had its own tryst with hostile takeovers. The year was 1985, the company: liquor major Shaw Wallace and the man for that moment, the late Manu Chhabria.

By then, under the redoubtable S Panduranga Acharya, its chairman and managing director, Shaw Wallace had built an enviable portfolio of liquor brands including Royal Challenge, Haywards (named after Acharya’s predecessor Sir Anthony Hayward), Director’s Special, Antiquity and of course Officer’s Choice, among the world’s highest-selling whiskeys.

It was no surprise that it caught the eye of Chhabria, the canny NRI businessman who started with an electronics store in Mumbai’s Lamington Road before moving base to set up the Jumbo Group out of Dubai.

However, it was Vijay Mallya -- for whom Shaw Wallace represented a constant threat to his own liquor business -- who initiated the hostile bid roping in Chhabria for support.

The support act soon became the main lead and the wily Chhabria ended up stealing the prize from right under Mallya’s eyes. For good measure, he is also believed to have tipped off Enforcement Directorate officials about the possible flouting of India’s stringent forex regulations at the time by Mallya leading to the latter’s arrest on June 5, 1985.

Engulfed in all this, Mallya had to abandon the chase for Shaw Wallace leaving Chhabria to soldier on even though Acharya led a stirring fightback.

Eventually, two years after the battle had begun, at a crucial shareholders’ meeting in 1987 called to decide the ownership issue, Acharya was forced to accept the inevitable when financial institutions which had hitherto backed him decided to abstain from voting. While the exact reasons have never been clearly revealed, it is believed Chhabria was able to get the then government to back his bid.

With that, Shaw Wallace passed into Chhabria’s hands but Mallya kept it in his sights for the next 20 years and seven years after one of India’s best-known corporate raiders had passed away, the Calcutta High Court's finally approved the amalgamation of Shaw Wallace with United Spirits Ltd (USL).

The Shaw Wallace saga doesn’t end there. In 2009, Manu Chhabria’s mother, Ranibai Chhabria, challenged the sale of Shaw Wallace by his wife and daughter to the UB group, on the grounds that she was entitled to a fifth of her son's estate.

(Edited by : Nazim)

First Published:Jan 25, 2021 6:02 PM IST