Key Developments: Diageo PLC (DGE.L)
Latest Key Developments (Source: Significant Developments)
United Breweries Holdings Ltd, Diageo Plc and United Spirits Limited Announce Agreement Under With Diageo Plc Will Acquire United Spirits Limited
United Breweries Holdings Ltd, Diageo Plc and United Spirits Limited announced agreement under which Diageo Plc would acquire 27.4% stake in USL, the spirits company in India. The consideration will be INR1440 per share and the total consideration would be INR57,254 million (approximately GBP660 million). Following completion of these agreements, Dr Vijay Mallya will continue in his current role as Chairman of USL, and UBHL and Dr Mallya will work with Diageo to build the USL business as the current consumer trends for premiumisation accelerate in India. The agreements are in two parts: An agreement to acquire a 19.3% interest in the current share capital of USL at a price of INR1440 per share from the UBHL group, the USL Benefit Trust, Palmer Investment Group Limited and UB Sports Management (two subsidiaries of USL) and SWEW Benefit Company (a company established for the benefit of certain USL employees). Following this disposal, the UBHL group would continue to have a shareholding in USL amounting to 14.9% of current share capital. The shareholders of USL will be asked to approve the preferential allotment to Diageo at a price of INR 1440 per share of new shares amounting to 10% of the post-issue enlarged share capital of USL. On completion of the share purchases as described above and in the event that the tender offer were fully subscribed, Diageo will hold 53.4% of the enlarged USL share capital at an aggregate cost of INR111,665 million (approximately £1,285 million). Full Article
Business Standard reported that United Spirits Ltd, which is in talks to sell a stake to UK giant Diageo Plc , said that it will sell 935,982 shares in Pioneer Distillers, a stake that on October 19, 2012, price would be worth INR45.49 million. Both companies are controlled by Vijay Mallya, to try to raise funds for his embattled Kingfisher Airlines , which has been grounded since the start of the month. Full Article
The Economic Times reported that Diageo plc is close to acquiring 25% stake in Vijay Mallya-controlled United Spirits. A formal announcement of the deal is likely to happen in two days. Diageo will have to make an open offer to acquire a controlling 51% stake in USL. The deal is likely to be struck at a price of INR1,300-1,500 per share. As per the terms of the transaction, Mallya will sell 12% to Diageo and follow it up by buying the treasury stock of the company owned by a trust. USL will then make a preferential allotment to Diageo, giving the British giant a 25% stake. This will be followed by an open offer to minority shareholders. Mallya will hold around 15% in the company, post deal. In a rare joint statement on September 26, Diageo and United Spirits said that Diageo is in talks with USL and UB Holdings for a possible investment in USL. People close to the development said that legal firms — Amarchand & Mangaldas for USL and Platinum Partners for Diageo —are drafting the documents. Full Article
LONDON, Sept 17 - A leading UK-based shareholder advisory group has recommended investors vote against resolutions at the annual general meetings of leading drinks company Diageo and Irish airline Ryanair.