At the beginning of 2012, a debtburdened Kishore Biyani roped in Vishal Kampani of investment bank JM Financials to advise him on easing his financial strife. Weighed down by debt of some Rs 5,800 crore, the founder of the Future Group retail enterprise was examining various options to cut operating costs to keep the business humming.

One way of doing this would be to ally with a rival retailer at the back end and exploit synergies in the supply chain. Biyani asked Kampani to examine whether the Aditya Birla group would be interested in such an arrangement.

After all, both were in the fashion apparel business – Biyani with Pantaloon and Birla with Madura Fashion & Lifestyle. Selling his fashion flagship was the last thing on Biyani’s mind.

Kampani wasted little time in fixing up a meeting withKumar Mangalam Birla, chairman of the Aditya Birla group. In the second week of January, Biyani and Birla met for the first time.

That’s when the latter dropped the bomb by suggesting that Biyani part with a controlling stake in the business that helped him earn pioneer status in organised retail – Biyani had set up Pantaloon Retail way back in 1997. A horrified Biyani rejected the offer outright, says a person who was privy to the proceedings.

Not only was Pantaloon the format closest to his heart – the emotional attachment was considerable – it’s also the business with the best prospects: operating margins in the fashion format are robust, at around 30%, as against single digits for foods retailing. Selling Pantaloon would be akin to kissing the Future Group’s ticket to a turnaround goodbye – or at least that was how Biyani would have seen it.

The retail rajah till then had not considered selling a core business; but if push came to shove – and it was coming to that – Biyani had opened his mind to parting with stakes in formats like Central, Brand Factory and even the fashion arm of Big Bazaar, the hypermarket chain. Letting go of Pantaloon -or even a part of it – was unthinkable, say officials close to Biyani.

That was the cue for Birla to make the unthinkable thinkable for Biyani. During the course of over half-a-dozen one on one-meetings, Birla strengthened his equation and personal rapport with Biyani.

Before attempting to clinch the deal, Birla realised that getting the chemistry right was imperative; that both promoters belong to the close-knit Maheshwari Marwari community helped.