United Spirits rose 0.62% to Rs 2,597.10 at 12:18 IST on BSE after Diageo purchased 19.67 lakh additional shares of the company at Rs 2400 each on Tuesday, 26 November 2013.
Meanwhile, the BSE Sensex was down 55.37 points, or 0.27%, to 20,369.65.
On BSE, 1.26 lakh shares were traded in the counter compared with average volume of 2.63 lakh shares in the past one quarter.
The stock hit a high of Rs 2,657 and a low of Rs 2,582 so far during the day. The stock hit a record high of Rs 2,815 on 18 July 2013. The stock hit a 52-week low of Rs 1,708.20 on 5 April 2013.
The stock had underperformed the market over the past one month till 26 November 2013, sliding 1.65% compared with the Sensex's 1.25% fall. The scrip had, however, outperformed the market in past one quarter, rising 14.96% as against Sensex's 10.06% rise.
The large-cap company has an equity capital of Rs 145.33 crore. Face value per share is Rs 10.
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Relay BV, a wholly-owned subsidiary of Diageo, purchased 19.67 lakh United Spirits (USL) shares on BSE on Tuesday, 26 November 2013. The shares were acquired at Rs 2400 each, valuing the transaction at Rs 472.31 crore.
Meanwhile, Morgan Stanley Asia (Singapore) Pte offloaded 39.18 lakh shares of USL worth Rs 943 crore through open market at an average price of Rs 2406.51.
Last year, Diageo had announced that it would pick up 53.4% stake in USL in a multi-structured deal.
As per an agreement reached between Diageo and the UB group in November 2012, Diageo agreed to acquire a 27.4% stake in United Spirits -- partly by acquiring shares directly from the promoter entities of the United Breweries group and partly by way of subscribing to a preferential share issue of United Spirits. The agreement triggered a mandatory open offer from Diageo to acquire additional 26% shares in United Spirits as per the Securities & Exchange Board of India's takeover norms.
Diageo's mandatory open offer to acquire an additional 26% in United Spirits at an offer price of Rs 1,440 per share closed on 26 April 2013. The company accepted bids for 58,668 shares as against proposed open offer size of 3.77 crore shares.
As on 30 September 2013, Relay BV held 3.63 crore equity shares, or 25.02% stake in USL. After the latest acquisition, Relay BV stake in USL has increased to 3.83 crore shares, or 26.37%.
Meanwhile, shares of USL fell 1.52% to Rs 2581.05 on Tuesday, 26 November 2013, after Diageo offered to sell a majority of the Whyte & Mackay (W&M) whisky business after the UK's competition authority, the Office of Fair Trading (OFT), raised concerns about the impact of its acquisition of USL on whisky prices in the UK.
OFT said Diageo, the world's biggest distiller, and W&M controlled a significant part of the UK market.
It has been ruled that Diageo's ownership of W&M will substantially reduce that competition, and potentially cause price increases for retailers. As a result, Diageo has offered to sell the majority of its W&M business.
OFT said in a statement that the divestment of Whyte & Mackay would include the entirety of the W&M business with the exception of (1) the Dalmore and Tamnavulin malt distilleries (including assets used to run those distilleries), (2) the Dalmore and Tamnavulin brands and maturing inventory from these distilleries as well as associated management and operations; (3) the management and staff for each distillery as well as any supply arrangements specifically associated with either production at the sites and (4) sale of product from the sites. As such the proposed undertakings in lieu of a reference will cover all of W&M's blended Scotch whisky brands including W&M as well as W&M's private label operations. W&M will retain its malt distilleries at Jura and Fettercairn and the Invergordon grain distillery, the statement added.
OFT said that its duty to refer the merger to the Competition Commission is suspended till it finishes considering Diageo's W&M offer.
United Spirits announced after market hours on Monday, 25 November 2013, that its board will consider the OFT announcement and determine further course of action in this regard.
The United Breweries (UB) group acquired W&M for 595 million pound sterling in 2007. Media reports suggested that the sale of W&M would help reduce the debt on USL's books, currently at more than Rs 7000 crore.
USL's net profit surged 273% to Rs 94.30 crore on 7% growth in revenue to Rs 2038.70 crore in Q2 September 2013 over Q2 September 2012.
USL is the largest alcohol beverage company in India selling 123.70 million cases for the fiscal ending 31 March 2013.
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