India's United Spirts may up stake offer to Diageo
Indian liquor maker United Spirits said on Friday it was prepared to offer a stake of more than 15 per cent and board representation to Diageo Plc to ensure a successful conclusion to talks that began last year.business Updated: Feb 13, 2009 14:34 IST
Indian liquor maker United Spirits said on Friday it was prepared to offer a stake of more than 15 per cent and board representation to Diageo Plc to ensure a successful conclusion to talks that began last year.
Diageo, the world's largest alcoholic drinks group, said there was no certainty of a deal with United Spirits, the world's third-largest spirits maker by volume.
United Spirits chairman Vijay Mallya said while he had intended to offer Diageo a stake of less than 15 per cent, using shares that United had bought back and was holding on its books, he was willing to offer more if Diageo wanted.
"Absolutely... I have already done it with United Breweries. I brought in Scottish & Newcastle and they made a public offer. I have already done it before and I don't see why I should have a problem with that now," Mallya told CNBC TV18.
He also said that if Diageo wanted board representation then he would not stand in the way.
Under Indian law, the purchase of a 15 per cent stake triggers a mandatory open offer for a further 20 per cent of the company.
"Diageo can confirm it is reviewing a possible collaboration with United Spirits. However there is no certainty at this stage that these discussions will result in a transaction," a spokeswoman for Diageo in India said.
Media reports have said United Spirits, which has a market value of about $1.4 billion, would use proceeds from the stake sale to reduce debt of $1.2 billion from its purchase of Scottish spirits maker Whyte & Mackay in 2007.
Mallya said United would also push ahead with plans to sell 49 per cent in Whyte & Mackay, which was part of the discussions with Diageo.
"So, yes, with or without Diageo, that is something that is very much on my agenda because I have confirmed that in six months I will deleverage United Spirits, and it is certainly one of the options before me," Mallya said.