United Spirits Slumps as Diageo Open Offer Ends Today
Shares in United Spirits fell as much as 5 per cent to Rs 2,662 on Thursday, the last day to tender shares in Diageo Plc's open offer.
Diageo, the world's largest liquor maker, made a Rs. 11,448.91 crore open offer to public shareholders of United Spirits to acquire an additional 26 per cent stake. This is Diageo's second attempt to gain majority control in India's number one alcoholic beverages firm.
The open offer was made at Rs 3,030 per USL share which was more than double the price of Rs 1,440 offered in the previous bid last year.
The offer opened on June 6 and will end today.
Gaurang Shah, assistant vice president at Geojit BNP Paribas Financial told NDTV that it is a good opportunity for short to medium-term investors of USL to tender their shares in the open offer.
June future contracts of USL were trading at around 4 per cent discount to cash prices as the stock is expected to fall after its open offer ends.
When the offer was announced on April 12, shares in USL were trading 15.31 per cent lower than the open offer price. So it was a good opportunity for arbitrageurs to buy shares from open market and tender their shares in the open offer to pocket the premium offered in the open offer.
On the last day of the open offer, there's no opportunity for arbitrageurs to make profits, so the stock has seen selling pressure, analysts say.
The price difference in cash market and June futures of USL is likely to converge by June 26, which is the expiry day for June series. So either the stock price in cash market will fall or the futures prices will rise to converge with each other.
Shares in USL traded 3.87 per cent lower at Rs 2,693.90 on NSE as of 10.35 a.m.
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