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Sebi clears Diageo's open offer for Pioneer Distilleries

Proposed open offer is part of the United Spirits- Diageo deal, whereby the UK firm has become a significant shareholder in USL

Press Trust of India  |  New Delhi 

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Market regulator Sebi has cleared UK-based Diageo Plc's open offer for acquiring shares worth Rs 15.78 crore of Vijay Mallya group firm Pioneer Distilleries.

The proposed open offer is part of the United Spirits- Diageo deal, whereby the UK firm has become a significant shareholder in United Spirits Ltd (USL).

As per Sebi's latest weekly status update of open offers as on August 16, the market regulator issued its final observations on the open offer, which are necessary for the offer and the deal as a whole to go through.

The open offer for Pioneer Distilleries would begin on August 28 and end on September 11, the acquirer had said last month.

The offer would be made by Relay B V, which is part of Diageo Plc, along with Diageo and United Spirits.

Under the offer, these entities plan to acquire up to 2,466,168 equity shares of face value of Rs 10 each at an offer price of Rs 64.02 per equity share.

The offer would be worth over Rs 15.78 crore. United Spirits holds 81.58% stake in Pioneer Distilleries and through the offer, the entities are looking to buy all the remaining shares in the target company.

Diageo, the world's largest spirits maker, recently acquired 25.02% stake in Vijay Mallya-led United Spirits on completion of a share purchase deal.

Last year, Diageo had announced that it would pick up 53.4% stake in United Spirits in a multi-structured deal for a total of Rs 11,166.5 crore. Instead, it now has 25.02% stake in United Spirits for a total consideration of Rs 5,235.85 crore.

However, Diageo's open offer to buy another 26% stake from United Spirits' public shareholders had elicited tepid response.

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First Published: Mon, August 19 2013. 19:53 IST