Diageo's open offer for United Spirits shares delayed: source

Mon Jan 7, 2013 7:53pm IST

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REUTERS - UK drinks group Diageo's mandatory tender offer to buy up to 26 percent of shares in India's United Spirits has been postponed as the deal has yet to receive local regulatory approvals, a source with direct knowledge of the matter said on Monday.

Diageo agreed in November to buy a 53.4 percent stake in United Spirits Ltd for $2.1 billion under a two-stage process including the mandatory tender offer which was set to open on Monday and close on January 18.

A new date will now be set for the offer after the deal receives approval from the capital markets regulator Securities and Exchange Board of India and the Competition Commission of India, said the source.

United Spirits, which is currently controlled by Indian businessman Vijay Mallya, declined to comment on the open offer.

"The initial timings were clearly outlined as indicative only," a Diageo spokeswoman said in London.

"We continue to work towards our initial timeline, which would see the transaction completing in Q1 2013," .

Shares in United Spirits ended down 1.2 percent at 1,914.25 rupees on Monday, higher than Diageo's offer to minority shareholders of 1,440 rupees a share. The stock is up nearly 43 percent since the announcement on the deal.

Some analysts have said the sharp jump in the stock price could mean the British group, owner of such brands as Johnnie Walker whisky and Smirnoff vodka, will be forced to sweeten the offer price.

(Reporting by Sumeet Chatterjee in Mumbai,; Anurag Kotoky in New Delhi and Anjuli Davies in London; Editing by Greg Mahlich)

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