United Spirits in red as Diageo open offer begins

MUMBAI: Shares of United Spirits were down on profit booking in a lackluster market as the U.K.-based Diageo began its open offer to acquire 26 per cent stake in the company for Rs 1440 per share.

According to analysts, the open offer is likely to fail as the current market price of United Spirits is at a premium of 23 per cent to the offer price. The offer closes on April 26.

The price for the open offer is at the same level that Diageo is acquiring shares from the current promoters of the company.

“Diageo made it clear that there was no case to increase the open offer price and that all the shares would be acquired at the same level as they pay to the existing promoters of the company. However, with the current share price, we believe Diageo is unlikely to get any shares tendered in the open offer,” said a Nomura report.

At 10:20 a.m.; the stock was at Rs 1,769.80, down 1.25 per cent, on the BSE. It touched a high of Rs 1,814 and a low of Rs 1,754.30 in trade today.