Scottish & Newcastle offer for UB shares opens

The open offer by British brewer Scottish & Newcastle (S&N) to acquire an additional 20 per cent equity stake in United Breweries at Rs 575 opened today.

S&N has acquired 17.5 per cent of United Breweries equity stake by way of preferential allotment, representing 37 lakh of Rs 10 each for a consideration of Rs 217 crore or Rs 575 per share. The open offer by the multinational is valid until February 25.

The United Breweries scrip today opened on the Bombay Stock Exchange at Rs 438, touched an intra-day high of Rs 438 before closing at Rs 423.45, 0.22 per cent lower than Friday's close of Rs 424.40.

The stock was also traded at the lowest price of Rs 421.05 during the day. The UB stock recorded volumes of 17,576 during the day, on BSE.

As per the arrangement between liquor baron Vijay Mallya's UB group and S&N, both the parties will hold equal shares in United Breweries, not exceeding 37.5 per cent each.

If S&N's open offer does not succeed to mop up additional 20 per cent, then United Breweries would issue warrants to S&N, in an effort to raise the foreign partner's equity stake to 37.5 per cent.

The company intends to issue warrants convertible into 51.09 lakh equity shares of Rs 10 each at Rs 575 to S&N. The company has received shareholder's approval for increasing its authorised share capital from Rs 250 crore, comprising 3 crore equity shares of Rs 10 each and 2.20 crore preference shares of Rs 100 each to Rs 280 crore divided into 3 crore equity shares of Rs 10 each and 2.50 crore preference shares of Rs 100 each.

United Breweries would also issue 1.72 crore, 3 per cent cumulative redeemable preference shares - series A of Rs 100 each at a price of Rs 100 each aggregating to issue price of Rs 172. 83 crore and 74. 07 lakh, 3 per cent cumulative redeemable preference shares - series B of Rs 100 each at a price of Rs 100 each aggregating to issue price of Rs 74.07 crore . The company is also investing Rs 180 crore for acquiring Karnataka Breweries & Distilleries.