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Publish Date : 10-Apr-2013

The Diageo Plc will launch an open offer on Wednesday in order to buy 26% stake in Vijay Mallya-promoted United Spirits Ltd (USL).

The Open Offer from Diageo to the shareholders of USL will remain open from 10th to 26th April, 2013.

The offer's Manager - JM Financial Institutional Securities has announced via updating the stock exchanges in a statement that the price of the open offer will stay at Rs 1,440 for each share.

The open offer price was negative for the USL stock that dropped by 3.75% to stand at Rs 1,755.5 on 5th April, 2013.

The JM Financial's statement added, "The offer price shall remain at Rs 1,440 per equity share. The same is justified in terms of Regulation 8(2) of the SEBI (SAST) Regulations. As described in the announcement dated February 11, 2013, the offer price would be paid together with interest computed at the rate of 10 per cent per annum on the offer price from March 19, till the date of actual payment to all the public shareholders who successfully tender their equity shares in the offer."

The open offer forms a component of the arrangement declared in last November when Diageo Plc decided to purchase 53.4% stake in USL. The deal comprises Diageo's acquisition of a 27.4% stake in USL, counting 19.3% from Vijay Mallya, over and above new equity from the company, while the rest stake of 26% will be bought from the common investors.

JM Financial has revealed that the offer letter has been sent to all 'eligible' investors.

The shares of the Mallya-promoted firm are owned by around 82,000 shareholders as of last December.

The possible response from these common shareholders regarding the open offer is clear considering the recent change in the ownership of the promoters holding, which are deposited with financial establishments as collateral, hurriedly.

The Bombay High Court, just a few days back, has declined the UB Group's appeal for a three-week stay order on offloading the firm's pledged shares with the lenders and permitted the banks to sell the shares in the market to get their monies back.

While taking loans for the insolvent Kingfisher Airlines, USL has pledged around 26 lakh shares with a banking consortium as collateral. The consortium was joined by 18 banks under the leadership of industry giant State Bank of India.

UB Group had claimed that the selling of shares by the financial establishments will be damaging for the investors of the publicly-traded company as well as detrimental to the continuing arrangement with Diageo plc.

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