Bangalore: The Securities and Exchange Board of India (Sebi) has allowed Diageo Plc more time to begin buying shares of United Spirits Ltd (USL) from public shareholders.
United Spirits’ Rs.11,170-crore stake sale to Diageo includes an open offer by the UK distiller to buy 26% of the Indian spirits maker from public shareholders.
Diageo can now begin its open offer 12 days after the companies get all regulatory approvals for the deal, instead of within five days as was required earlier, JM Financial, which is managing the open offer for Diageo, said in a filing with the BSE on Monday.
Diageo, though, will have to pay interest of 10% per annum to the public shareholders for the resultant delay, Sebi has said.
The open offer was expected to begin on 18 February after Sebi late last week gave conditional approval for the deal, which still needs clearance from the Competition Commission of India (CCI).
In November, Diageo, the world’s largest liquor company, struck a deal to buy 53.4% of Vijay Mallya’s USL. It agreed to purchase a 27.4% stake in USL, including 19.3% from Mallya, for £660 million, and fresh equity from the firm.
The British distiller agreed to follow up the purchase with an open offer to buy 26% of USL from public shareholders at Rs.1,440 a share—the price paid for the direct purchase.
In January, Mint reported that CCI had asked for more details on the USL-Diageo deal. Last week, UB executives familiar with the development said senior USL executives would meet CCI officials over the weekend to provide clarification on points raised by the regulator.