Diageo’s United Spirits deal is delayed8th January, 2013 by Andy Young
Diageo’s deal to buy a majority stake in India’s United Spirits has been delayed according to reports.
The deal for Diageo to buy a 53.4% stake in Vijay Mallya’s United Spirits was agreed last November. The deal was scheduled to take place over two tranches, including a mandatory tender offer.
In the initial timetable set out by Diageo, the tender offer was due to start on Monday, 7 January and close on Friday, 18 January, but this has been delayed.
Reuters reports that JM Financial Institutional Securities, the company managing the deal with the Bombay stock exchange, has said that a revised timeline for the tender offer will be announced soon.
The new timeline will still need to be approved by regulator Securities and Exchange Board of India, and the Competition Commission of India, before it can proceed.
A spokesperson for Diageo told the Scotsman that the initial dates set out when the deal was announced were a general guideline and that the main focus was for the deal to be completed in the first quarter of 2013.
She said: “We continue to work towards our initial timeline, which would see the transaction completing in Q1 2013.”
When the deal was announced in November last year Diageo said that it would buy a 53.4% majority stake in United Spirits for £1.2 billion, this saw the shares valued at 1,440 Indian rupees per share. At the close of the Bombay stock exchange on Monday, United Spirits shares were trading at 1,914.25 Indian rupees per share, which some reports have indicated might mean the open offer will not be subscribed.