Drinks giant Diageo's long-awaited purchase of 26% stake or around 38 million shares in Indian firm United Spirits through a mandatory public open offer has fallen flat.
The open offer is part of the deal signed in November 2012, when Diageo agreed to purchase 53.4% stake in United Spirits for nearly £1,285m. The deal also included purchase of 27.4% stake in United Spirits for £660m from United Breweries Holdings, Palmer Investment Group and United Breweries Sports Management and SWEW Benefit Company.
Diageo planned to acquire the remaining 26% of the enlarged share capital of United Spirits at a rate of INR1,440 ($26.4) per share.
However, the open offer closed for subscription on 26 April 2013 and there was no confirmation on the tendered shares from the company.
Diageo spokeswoman told The Wall Street Journal that they launched the mandatory tender offer to buy shares from United Breweries and for the subscription of the preference shares.
"We put in place the shareholder agreement and board governance structure to give us effective control based on two elements: the share purchase and the preferential allotment," spokeswoman added.
"We do not require any take up in the mandatory tender offer to achieve this control.
"The mandatory tender offer has now closed and the results will be announced in India in due course."
