CCI wants Diageo, USL to rework ambiguous parts of deal

UK-based Diageo and USL had announced a deal on November 9, 2012 under which the former had agreed to acquire up to 53.4% stake in the latter for an aggregate amount of Rs 11,166.6 crore. As part of the deal, Diageo would acquire 27.4% stake in USL for Rs 5,725.4 crore through a combination of share purchase from existing promoters and preferential allotment of shares. In addition, it will also acquire 26% stake for Rs 5,441.07 crore through open offer.

The proposed open offer for an additional 26% stake in USL entails purchase of about 3.8 crore shares at a price of Rs 1,440 per share totalling Rs 5,441 crore, by Relay BV, a wholly-owned subsidiary of Diageo.

The open offer price has emerged as another area of concern as the share price of USL had surged above Rs 1,440-level in the very next trading session after announcement of the deal on November 9. Later, the stock had surged to as high as near Rs 2,100 level and is currently trading at about Rs 1,826.