diageo's open offer to acquire 26% stake in vijay mallya's united spirits begins

Source: Financial ExpressDiageo

London-based liquor giant Diageo’s open offer to acquire 3.7 crore shares or 26% stake in United Spirits began on Friday. For a consideration of Rs 11,448 crore, Diageo’s stake in United Spirits will rise to 54.78% assuming full acceptance. The offer is priced at Rs 3,030/share.

Currently, Diageo through its wholly-owned subsidiary Relay BV, holds 28.78% in United Spirits. United Breweries Holdings’ stake stands at 5.93%.

Analysts say that the offer is unlikely to see full acceptance. “We do not expect a full acceptance for the offer and believe longer-term investors will wait for the premiumisation theme to play out in USL over the next 18-24 months,” said IDFC Institutional Securities in a recent note.

“The market seems to be implying an acceptance ratio in excess of 70%, considering the current spread between the estimated fair price and the current market price,” Kotak Institutional Equities added. Currently, the total public shareholding in United Spirits stands at 60% or 8.8 crore shares.

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