UK-based Diageo Plc has said it does not require shares mopped from the open offer to give itself “effective control” of Indian liquor major United Spirits.

Diageo, however, did not disclose the percentage of shares it was able to buy from Indian shareholders during the open offer which closed on April 26. According to sources in USL, it could be less than 5-6 per cent out of the 26 per cent stake it was supposed to buy through the open offer.

“We put in place the shareholder agreement and board governance structure to give us effective control based on two elements: the share purchase and the preferential allotment. We do not require any take up in the MTO (mandatory tender offer) to achieve this control,” a spokesperson from Diageo told Business Line in an email response. The spokesperson also said the details of the results with regard to MTO will be announced in due course.

In November last year, Diageo stuck a $2-billion deal with USL to buy up to 53.4 per cent stake in the Indian liquor giant controlled by Vijay Mallya.

According to the agreement, Mallya and his companies were to sell 27.4 per cent stake in USL through a combination of their own stake and issue of fresh shares. Another 26 per cent was to be picked up from the open offer at a price of Rs 1,440 a share.

If the entire 26 per cent stake had been mopped up, USL would have become a subsidiary of Diageo which would have over a period of time controlled 53.4 per cent in the Indian company.

The stock on Tuesday closed at Rs 2,347.30, a gain of Rs 59.4 or 2.6 per cent over Monday’s close. The stock, in fact, registered record high of Rs 2,383.95 during intra-day.

>giriprakash.k@thehindu.co.in

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