United Spirits Denies Reports On Potential Stake Sale Of RCB
The clarification comes after NDTV Profit reported British distiller and United Spirits' parent Diageo Plc is evaluating options to sell a partial or full stake in RCB.
United Spirits Ltd. on Tuesday said reports on potential stake sale in IPL franchise Royal Challengers Bengaluru are "speculative in nature" and denied any such proposal.
"The company would like to clarify that aforesaid media reports are speculative in nature and it is not pursuing any such discussions," the liquor maker said in a stock exchange filing.
The clarification comes after NDTV Profit reported British distiller and United Spirits' parent Diageo Plc is evaluating options to sell a partial or full stake in RCB.
The liquor giant is exploring ways to monetise the IPL franchise after its recent title win, according to people familiar with the matter. Diageo is talking to potential advisors to manage the deal. The conversations are still in early stages and being directly managed from London, the people added.
RCB, which recently won the IPL title for the first time in its 18-year run, is likely to be valued better. According to the people, Diageo is expecting strong interest from potential buyers.
Initially owned by liquor baron Vijay Mallya, RCB is one of the earliest teams in the IPL, with a large fan following, especially in the city of Bengaluru. It was also a way for Mallya to market his alcohol brands, as India prohibits direct advertising of alcoholic products.
The original RCB team and Mallya were a key component of the Kingfisher brand's "King of Good Times" advertisements.
After Mallya's financial collapse, Diageo took over his company, United Spirits, in 2014. It then renamed United Spirits to Diageo India. The current deal talks are also a way for the British alcohol major to exit non-core businesses, as it reinforces focus on the alcohol brands that it owns, the people quoted above said.
Diageo India owns the Royal Challenge, Antiquity Blue and McDowell's brands of blended whisky, the Scotch brand Black & White, vodka brand Smirnoff, among others.
Shares of United Spirits were trading 1.1% higher at Rs 1,610.2 piece at 3:15 p.m., after the clarification, compared to a flat benchmark Nifty 50.
