United Spirits gains on buzz of Diageo plan to hike stake

The stock was trading higher by 6% to Rs 2,495 on the BSE in otherwise weak market in noon deal.

United Spirits is trading higher by 6% to Rs 2,495, in an otherwise weak market in noon deals, amid media reports that Diageo is in initial talks to hike stake in the company.

The stock rallied 8% to Rs 2,554 in intra-day trade. The trading volumes on the counter jumped by more than five-fold with a combined 1.29 million shares changed hands on the BSE and NSE till 02:00 pm.

“The Exchange has sought clarification from United Spirits on May 03, 2016 with reference to the news flashed on CNBC TV 18 stating, "Diageo in initial talk to hike stake in United Spirit to 72%.” BSE said in a statement.

The National Stock Exchagne (NSE), said, that the Exchange has sought clarification from United Spirits with respect to recent news item captioned "Diageo in initial talk to hike stake in United Spirit to 72% via open market transactions.
 

The response from the company is awaited.

As on March 31, 2016, Diageo, through its wholly-owned subsidiary, Relay B.V., held 55.06% stake in United Spirits.

Thus far in the calendar year 2016, the stock has underperformed the market by falling 21% as compared to 3% decline in the benchmark S&P BSE Sensex till yesterday. The stock hit a 52-week low of Rs 2,232 on February 18, this year during intra-day trade.