Diageo in stake buy talks: United Spirits

Mallya has been scrambling for nearly a year to raise capital for his ailing Kingfisher Airlines Ltd, prompting market speculation that he may need to sell stakes in United Spirits or United Breweries Ltd, maker of his flagship Kingfisher beer.

United Spirits and Diageo held talks towards a deal that ultimately collapsed in 2009, and the companies said on Tuesday that the current negotiations might not result in a deal.

There is no certainty that these discussions will lead to a transaction, United Spirits, the world's largest spirits maker by volume, said in a statement to India's stock exchanges.

Diageo is looking initially to buy a 15 percent stake from Mallya, who owns about 28 percent of the company, and a further 10 percent from investors, one banker familiar with the matter told Reuters on Tuesday.

Mallya would retain a minority stake after the deal, sources have said.

Diageo may offer 1,200 rupees to 1,300 rupees a share, valuing the 25 percent stake at 42.5 billion rupees ($793 million), sources have said, declining to be identified because the talks were confidential.

Shares in United Spirits rose 2.4 percent on Tuesday to 1079.30 rupees and have more than doubled in 2012, with much of those gains coming in the past four months.

If it acquired 25 percent of United Spirits, Diageo would have to launch a mandatory open offer for

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