Diageo to buy 51 per cent stake in United Spirits for $2 bn: report
06 Nov 2012
The long-drawn-out talks between Britain's Diageo Plc and liquor baron Vijay Mallya's United Spirits Ltd (USL) are set to fructify this week with Diageo agreeing to pick up a 51 per cent stake in USL in a deal worth around $2 billion, according to an unconfirmed report.
The complex deal would involve the direct purchase of a portion of Mallya's holding, the issue of fresh shares and an open offer to buy stock from public shareholders, the Mint business daily reported today.
Under the SEBI takeover regulations, any entity buying a 25 per cent or higher stake in a company is required to make an open offer to acquire the rest of the company.
The report sent shares of United Spirits up 3.09 per cent to Rs1,257.30 on the Bombay Stock Exchange. USL shares have risen sharply this year on speculation about the stake sale.
The newspaper quoted two unidentified UB Group executives and two investment bankers as saying that the takeover was likely to be announced later this week.
United Breweries, the parent company of USL, refused to comment, while Diageo said it was not making any statement beyond one it issued in September.
In that statement, Diageo, makers of Johnnie Walker whisky, said it was in talks with United Spirits and parent United Breweries (Holdings) to potentially "acquire an interest in United Spirits".