U.S. firm sends legal notice to retailer
Future Retail shares fell 9% on Thursday after Amazon.com sent a legal notice to Future Group, alleging the retailer’s $3.38 billion asset sale to Reliance Industries breached an agreement with the e-commerce giant.Amazon had last year bought a 49% stake in Future Coupons, which owns a 7.3% stake in Future Retail. In August, Mukesh Ambani’s Reliance decided to buy the retail and some other businesses of Future Group.Amazon’s investment came with contractual rights that include a right of first refusal and a non-compete-like pact, according to media reports. An Amazon spokesperson said it had launched legal proceedings. “Amazon will try to explore all options to stop or delay the Reliance-Future deal but Reliance has all the muscle power and it won’t be an easy battle for Amazon to win at the court,” said Satish Meena, senior forecast analyst at Forrester Research.
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