Shares of Indian motorcycle maker Hero Honda recouped some losses after falling more than 6 percent on Tuesday on a television report that said Hero and KKR were in talks to buy out Honda Motor’s stake in the joint venture.
TV channel ET NOW said that India’s Hero Group founders, the Munjal family, was in talks to buy out 20 percent of Honda’s stake, while private equity firm KKR would buy the remaining six percent.
Citing unidentified sources, the report said the Munjals would buy the 20 percent stake from Honda for 70 billion rupees ($1.5 billion). Based on the company’s market cap of 358 billion rupees ($7.5 billion) on Monday, a 20-percent stake would be worth 72 billion.
Shares in Hero Honda were trading down 2.5 percent at 1,748.10 rupees at 0743 GMT, after having fallen as much as 6.8 percent to their lowest level in more than six months.
Hero Honda, 26 percent owned by Japan’s Honda, is India’s largest motorcycle maker. Honda also has a 100-percent owned subsidiary that makes motorcycles in India, competing with Hero Honda.
In a response to the report, Honda, Japan’s No. 2 automaker, said the company had no plans to sell its stake in Hero Honda at this time. A spokeman for KKR in India said the firm would not comment on market speculation.
A Hero Group spokesman could not be immediately reached by Reuters for a comment.