Monday, November 12, 2012

DIAGEO DEAL KEEPS MALLYA'S COMPANY IN HIGH SPIRITS


The shares of United Spirits jumped as much as 35 percent today to touch two-year high after many brokerages upgraded the stock, implying that Mallya has sold a stake to Diageo at a higher-than-expected price.

Morgan Stanley raised its rating on United Spirits to 'overweight' from 'equal-weight', saying the $2.1 billion deal priced the company "significantly higher" than its base case value and raised the stock target to Rs 1905.

Diageo last week agreed to buy a 53.4 percent stake in the liquor maker controlled Vijay Mallya by first acquiring 27.4 percent percent from its founders at 1,440 rupees per share, and then launching a mandatory offer for the remainder.

United Spirits shares closed at Rs 1832, up Rs 472 and touched intra day 104 week high of Rs 1875. The trading volumes too was very high.


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