United Spirits gains after reports Diageo seeks to hike stake in the firm to 72%

United Spirits rose 4.6% to Rs 2,468.65 at 14:30 IST on BSE after reports Diageo Plc is considering raising stake in the liquor maker to 72% from 54.78%.

Meanwhile, the BSE Sensex was down 172.59 points, or 0.68%, to 25,264.38.

Higher than normal volumes were witnessed on the counter. On BSE, so far 1.2 lakh shares were traded in the counter, compared with an average volume of 40,438 shares in the past one quarter. The stock hit a high of Rs 2,554.20 and a low of Rs 2,351.35 so far during the day. The stock hit a 52-week high of Rs 3,870 on 19 March 2015. The stock hit a 52-week low of Rs 2,232 on 11 April 2016. The stock had underperformed the market over the past one month till 2 May 2016, falling 5.51% compared with 0.66% gains in the Sensex. The scrip had also underperformed the market in past one quarter, dropping 3.82% as against Sensex's 3.66% gains.

The large-cap company has an equity capital of Rs 145.33 crore. Face value per share is Rs 10.

Diageo is reportedly exploring various options, including open market transactions to raise its stake in United Spirits (USL). Diageo gained complete control of the board of United Spirits post the exit of Dr Vijay Mallya from his position as chairman and non-executive director of the company in February this year, but seeks to protect its shareholding by hiking stake. Diageo in July 2014 had acquired 26% stake in USL by way of tender offer. As per an agreement reached between Diageo and the UB group in November 2012, Diageo agreed to acquire a 27.4% stake in United Spirits -- partly by acquiring shares directly from the promoter entities of the United Breweries group and partly by way of subscribing to a preferential share issue of United Spirits. The agreement triggered a mandatory open offer from Diageo to acquire additional 26% shares in United Spirits as per the Securities & Exchange Board of India's takeover norms.

Net profit of United Spirits declined 45.2% to Rs 40.95 crore on 22.87% rise in net sales to Rs 2638.09 crore in Q3 December 2015 over Q3 December 2014.

United Spirits makes alcoholic beverages. It is a subsidiary of British multinational Diageo plc. Relay B.V., an indirect wholly- owned subsidiary of Diageo Plc holds 54.78% stake in United Spirits (as per the shareholding pattern as on 31 March 2016).

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