Diageo has launched the tender offer through Relay B.V. a wholly-owned indirect subsidiary of Diageo. Relay currently holds 28.78% of the issued share capital of USL, acquired for a total investment of Rs 6,574 crore (726,550,972). On completion of the tender offer, if all shares are purchased, Relay will hold 54.78% of USLs issued share capital and will have paid approximately Rs 18,023 crore (1,859,009,692) for its total shareholding in USL.
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If the offer is subscribed in full, the total consideration payable, at the announced price for Diageos increased stake will represent a 38x multiple of USLs EBITDA on a consolidated basis for the year ended March 2013. Diageo's total investment of Rs 180,23 crore (1,859,009,692) in USL is expected to be EP positive in FY2022, the 7th full financial year after completion (assuming a 12 % WACC) and EPS accretive in the year ended 30 June 2016.
USL is the leading spirits producer in India. On a consolidated basis, in the financial year ended 31 March 2013, USL earned net revenue of Rs 10,598 crore (1,048.3 million) from operations, EBITDA of Rs 1,354 crore (134.0 million) and losses after tax of Rs 105 crore (10.4 million). USL had INR 16,384 crore (1,621 million) of total assets on a consolidated basis as at 31 March 2013.
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