The Open Offer from Diageo Plc to United Spirits (USL) shareholders to mop up 26 per cent stake will begin on April 10 and end on April 26.
JM Financial Institutional Securities, Manager to the deal, informed the exchanges that the open offer price will remain at Rs 1,440 a share.
As a reaction to this, the USL stock crashed 3.75 per cent to Rs 1,755.5 on Friday.
“The offer price shall remain at Rs 1,440 per equity share. The same is justified in terms of Regulation 8(2) of the SEBI (SAST) Regulations. As described in the announcement dated February 11, 2013, the offer price would be paid together with interest computed at the rate of 10 per cent per annum on the offer price from March 19, till the date of actual payment to all the public shareholders who successfully tender their equity shares in the offer,” JM Financial said in the statement.
The open offer is part of the deal announced in November last when Diageo Plc agreed to buy 53.4 per cent stake in USL. That includes a 27.4 per cent stake in USL by Diageo — including 19.3 per cent from Vijay Mallya, as well as fresh equity from the firm — and the remaining 26 per cent stake from the public shareholders.
JM Financial claims the letter of offer has been dispatched to all ‘eligible’ shareholders.
As of December 2012, about 82,000 shareholders have exposure in the company. It’s anybody’s guess as to how these public shareholders will react to the open offer as the promoters holding, pledged with financial institutions, have been changing hands at a quick pace in the last few days.
Earlier this week, the Bombay High Court rejected a petition filed by UB Group for a three-week stay on selling of its pledged shares with the banks and allowed the lenders to offload the shares in the market to recover their dues.
USL has pledged about 26 lakh shares with a consortium of 18 banks led by SBI as collateral for loans taken by the bankrupt Kingfisher Airlines.
The company’s contention was that the selling by financial institutions would not only harm the investors of the listed entity, but also will impact the ongoing deal with Diageo.
Read also: Will the open offer sail through?