United Spirits rallies 8 pc as CCI clears USL-Diageo deal
CCI has approved Diageo Plc's proposed majority stake purchase in USL, saying the deal would not have adverse impact on competition.
By ET Online |
NEW DELHI: United Spirits Ltd surged over 8 per cent in trade on Friday after the Competition Commission of India (CCI) approved UK major Diageo Plc's proposed majority stake purchase in United Spirits.
At 09:25 am, United Spirits Ltd pared some of its morning gains and was trading 5.1 per cent higher at Rs 1930. It has hit a low of Rs 1845 and a high of Rs 1999 in trade today.
Competition Commission has approved UK major Diageo Plc's proposed majority stake purchase in United Spirits, saying the deal would not have adverse impact on competition.
The proposed transaction worth about $ 2 billion would provide much needed cash for Mallya's UB group. Under the terms of the deal, Diageo would acquire up to 53.4 per cent stake in United Spirits within five years.
As per the deal Diageo would first acquire a 27.4 per cent stake in USL at a price Rs 1,440 per share, and follow it up with a mandatory open offer of 26 per cent, which if fully subscribed would take Diageo’s stake in USL to 53.4 per cent.
“The SEBI has already sent its final observations on the open offer and is expected to approve the open offer if the objectionable clauses in the deal which are in the nature of forward contract are removed,” Angel Broking said in a note.
The brokerage firm maintains a neutral view on the stock.
At 09:25 am, United Spirits Ltd pared some of its morning gains and was trading 5.1 per cent higher at Rs 1930. It has hit a low of Rs 1845 and a high of Rs 1999 in trade today.
Competition Commission has approved UK major Diageo Plc's proposed majority stake purchase in United Spirits, saying the deal would not have adverse impact on competition.
The proposed transaction worth about $ 2 billion would provide much needed cash for Mallya's UB group. Under the terms of the deal, Diageo would acquire up to 53.4 per cent stake in United Spirits within five years.
As per the deal Diageo would first acquire a 27.4 per cent stake in USL at a price Rs 1,440 per share, and follow it up with a mandatory open offer of 26 per cent, which if fully subscribed would take Diageo’s stake in USL to 53.4 per cent.
“The SEBI has already sent its final observations on the open offer and is expected to approve the open offer if the objectionable clauses in the deal which are in the nature of forward contract are removed,” Angel Broking said in a note.
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The brokerage firm maintains a neutral view on the stock.
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