Sebi gives observations on Diageo’s USL takeover

Market regulator Sebi has given its final observations on Diageo's proposed R5,441-crore open offer for a majority stake in Vijay Mallya's United Spirits (USL), which may pave the way for concluding a key takeover deal for the UK-based drinks company that will also bring much-needed funds to UB Group. A final observation from Sebi is necessary to launch an offer. But in case the regulator has asked for changes in the clauses, the offer can proceed only when they are complied with.

"Diageo can confirm that we have received an observation letter from Sebi, which is part of the ongoing approval process. We are now considering Sebi's comments," said a statement from Diageo. Offer manager JM Financial did not respond to a query from FE in this regard.

According Sebi's website, it had given its final comments on January 31. A UB Group spokesman said that they were unable to comment. The deal would also require a clearance from the CCI.

The fair trade authority had asked Diageo for additional information and is currently processing its application. It is not clear what Sebi's final comments are, but it had previously raised concerns on the allotment of preferential shares to the acquirer.

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