Shareholders of USL may not go for Diageo offer

Diageo Plc of the UK on Tuesday said it will launch the mandatory open offer to buy up to 26 per cent additional stake in United Spirits Ltd from public shareholders at a cost of over Rs 5,400 crore on January 7. However, shareholders are unlikely to opt for the Diageo offer as the USL share is now quoting at Rs 1,762.20 on the stock exchanges, a premium of 22.37 per cent, market analysts said.

"When I can sell the shares at a higher price in the market, why should I surrender the shares to Diageo at a lower price. Diageo offer won't work out unless they increase the open offer price and bring it closer to the market price," said BSE dealer Pawan Dharnidharka. "Diageo bought the shares at Rs 1,440 per share from Vijay Mallya. Now, Diageo valuation is up by around 23 per cent."

USL shares trading at Rs 450 on January 12 soared by 334 per cent to Rs 1,954 on November 15 after the deal. Diageo will acquire up to 3.77 crore equity shares of face value of Rs 10 each at an offer price of Rs 1,440 per share.

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