January 31, 2011 / 1:54 PM / 8 years ago

Bain close to stake buy in India's Hero Honda-report

MUMBAI, Jan 31 (Reuters) - U.S. private equity firm Bain Capital and the Government of Singapore Investment Corp are close to buying a minority stake in India’s largest motorcycle maker Hero Honda HROH.BO, the Financial Times reported on Monday.

The deal could be worth as much as $1.75 billion, the report on FT’s website said, quoting unnamed people familiar with the matter. The buyers are expected to receive only one board seat, the report said.

Last month, Hero Group’s founders agreed to buy out Honda Motors’ 26-percent stake in the Indian joint venture, ending a nearly 25-year-old partnership. [ID:nSGE6BF033]

The Munjal family has asked potential buyers to pay between 1,500 to 1,650 rupees a share, the paper said, adding the proceeds would go to the family and not the company or its shareholders.

The stake sale plan drew interest from several other global private-equity firms including Carlyle, KKR (KKR.N), TPG and Warburg Pincus, in addition to sovereign wealth funds, the FT said.

On Monday, shares in Hero Honda, valued at $7.3 billion by the market, closed 1.6 percent down at 1,630.50 rupees in a weak Mumbai market .BSESN. ($1=45.90 rupees) (Reporting by Prashant Mehra; Editing by Aradhana Aravindan)

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