United Spirits hits new high on buzz of Diageo deal talk, Latest stock price
Shares soared more than 10% on Monday to a new 52-week high of Rs 1,100.95 on NSE on reports that the world's biggest drinks company Diageo Plc was in talks to acquire stake in the Vijay Mallya owned liquor firm.
Several other news reports indicate that Diageo could get a right to appoint majority of USL board members including the chairman. Mallya is currently the chairman of United Spirits.
This is not the first time that the two companies have initiated deal talks. The two companies were earlier in talks in 2008-09, but the talks failed over valuations.
The two companies have declined to comment on the latest news reports. However, according to the British Telegraph newspaper, Diageo's CEO Paul Walsh had earlier this month reiterated his interest in taking a minority stake in USL.
Analysts say Diageo could be interested in a stake in USL as it will get access to a large and growing liquor market in India and will also get hold of many local spirits brands. And this time around with UB group struggling with loss-making Kingfisher Airlines , a deal is more likely to go through, they feel.
"The deal is expected to go through this time as UB group is looking to raise funds for repaying the debts of its other group company Kingfisher Airlines, which is struggling with losses and cash shortage," according to Angel Broking.
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