Sebi okays Diageo’s open offer for another 26% in Mallya’s USL

The Securities & Exchange Board of India on Monday cleared global liquor giant Diageo Plc's open offer to acquire an additional 26-per cent stake in United Spirits Ltd for Rs11,448.91 crore.

This is the second open offer made by Diageo to gain majority control in India's leading liquor company.

As part of the deal to buy a 53.4-per cent stake in the Vijay Mallya-led UB group's arm USL, Diageo has made the requisite open offer for purchase of a further 26 per cent stake in the company from non-promoter shareholders.

The open offer, which was made last month, has been now cleared by SEBI, according to a public notification.

The global liquor giant would pay Rs3,030 per share of USL, which is more than double the price of Rs1,440 per share it offered in the previous bid last year.

The offer for 3,77,85,214 USL shares, being made through Relay BV, a wholly owned indirect subsidiary of Diageo, is another attempt by the company to increase its stake beyond 50 per cent in the flagship firm of the UB Group.

If the offer is fully subscribed, Relay will hold 54.78 per cent of USL's issued share capital and will have paid about Rs18,023.14 crore for its total shareholding in USL.

Relay currently holds 28.78 per cent of USL's issued share capital, acquired for Rs6,574.22 crore.

The open offer is scheduled to start on 11 11 and close on 24June.

Diageo, which sells brands such as Smirnoff vodka and Johnnie Walker whiskey, had announced in 2012 it would pick up a 53.4 per cent stake in USL in a multi-structured deal for a total of Rs11,166.5 crore.

The open offer Diageo made in April last year met a lukewarm response from shareholders of USL - India's top spirits maker with brands such as Signature, Bagpiper, McDowell's, Antiquity and Royal Challenge - and it picked up a 25.02 per cent stake for Rs5,235.85 crore.