Diageos open offer for USL begins on Apr 10

Written by feBureau | Mumbai | Updated: Apr 6 2013, 09:13am hrs
The much-delayed open offer by Diageo to acquire another 26% equity stake from public shareholders of United Spirits (USL) will begin on April 10 and will be open till April 26, according to a stock exchange announcement.

... we wish to inform you that the acquirer has received all applicable statutory approvals. The tendering period shall commence on April 10, 2013, and close on April 26, 2013, stated the exchange announcement by United Spirits.

The offer price has been fixed at R1,440. Shares of United Spirits lost 3.75%, or R68.40, on Friday to close at R1,755.50. The shares have lost over 8.5% in the last one week.

The offer price shall remain at R1,440 per equity share... the offer price would be paid together with interest computed at the rate of 10% per annum on the offer price from March 19, 2013, till the date of actual payment to all the public shareholders who successfully tender their equity shares in the offer, added the announcement. Early this week, the independent directors of the company gave their stamp of approval to the open offer price. Based on the recommendations, the independent directors are of the opinion that the open offer to the public shareholders of United Spirits is fair and reasonable as on the agreement date, a notice filed with the exchange stated.

While the independent directors have approved the open offer price, the Street is sceptical about the success of the open offer due to the simple reason that the current market price is higher than the open offer price. Diageo had earlier said it would launch its over R5,441-crore open offer to acquire 26% stake in United Spirits between January 7, 2013 and January 18, 2013.

On the house

* The tendering period shall commence on April 10 and close on April 26

* Offer price fixed at R1,440, to be paid with 10% per annum interest on offer price

* The current market price is higher than the open offer price