United Spirits tumbles nearly 4% after Karnataka HC order
Mumbai: Shares of United Spirits Monday slipped nearly 4 percent after the Karnataka High Court declared as "null and void" the sale of shares of the Indian firm by its holding company to UK-based Diageo.
USL's scrip lost 3.65 percent to settle at Rs 2,573.20 on the BSE. In intra-day trade, the stock dropped 5.97 percent to Rs 2,511. At the NSE, the stock ended at Rs 2,577, down 3.50 percent.
"We should not expect any major impact as management of USL will continue with Diageo and United Breweries Holding will go to Supreme Court," said brokerage Nirmal Bang Securities.
United Spirits Ltd and Diageo had on Friday said they would take steps to protect their interests after the Karnataka High Court declared as "null and void" the sale of shares of the Indian firm by its holding company to the UK-based giant.
"We will take all necessary steps to protect Diageo's interests as well as our own," UB Group Chairman Vijay Mallya had said.
Similarly, Diageo said it is awaiting receipt of the detailed written order of the division bench of the Court of Appeal in Karnataka.
We do not believe that there are any grounds for declaring the sale of the 10,141,437 shares in United Spirits Limited (USL) (6.9 percent of USL) purchased by Diageo on 4 July 2013 from United Breweries (Holdings) Limited (UBHL) as void, it stated.
Last year, Diageo had announced that it would pick up 53.4 percent stake in USL in a multi-structured deal for a total of Rs 11,166.5 crore.
However, it could acquire only 25.02 percent stake in USL for a total consideration of Rs 5,235.85 crore due to tepid response from shareholders in its open offer.