Diageo launches open offer to hike stake…
Diageo PLC has launched an open offer for acquisition of up to
3,77,85,214 (26%) fully paid equity shares of | 10 each of United Spirits
(USL). Diageo currently hold 28.8% in United Spirits and full acceptance
of the open offer would take Diageo’s stake to 54.8%. The open offer
aggregates to total consideration of | 11,448.9 crore with an open offer
price of | 3030 per share. The non-promoter holding of USL stands at
~61%, of which institutional holding is ~45%.
Long term perspective remains intact
We believe Diageo’s open offer at | 3030 reiterates the long term value
unlocking that can be achieved through de-leveraging and
premiumisation strategy. Also, Diageo’s endeavour to significantly
increase the stake in USL provides confidence towards it’s commitment
to turn around USL in India. With Diageo having better control of USL, we
believe the structural changes will get implemented at a more rapid pace,
thereby providing scope for further upside
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Diageo PLC has launched an open offer for acquisition of up to
3,77,85,214 (26%) fully paid equity shares of | 10 each of United Spirits
(USL). Diageo currently hold 28.8% in United Spirits and full acceptance
of the open offer would take Diageo’s stake to 54.8%. The open offer
aggregates to total consideration of | 11,448.9 crore with an open offer
price of | 3030 per share. The non-promoter holding of USL stands at
~61%, of which institutional holding is ~45%.
Long term perspective remains intact
We believe Diageo’s open offer at | 3030 reiterates the long term value
unlocking that can be achieved through de-leveraging and
premiumisation strategy. Also, Diageo’s endeavour to significantly
increase the stake in USL provides confidence towards it’s commitment
to turn around USL in India. With Diageo having better control of USL, we
believe the structural changes will get implemented at a more rapid pace,
thereby providing scope for further upside
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