Diageo's open offer for USL shares delayed

 UK drinks group Diageo's mandatory tender offer to buy up to 26 per cent of shares in India's United Spirits (USL) has been postponed as the deal has yet to receive local regulatory approvals, a source with direct knowledge of the matter said on Monday.

Diageo agreed in November to buy a 53.4 per cent stake in United Spirits Ltd for $2.1 billion under a two-stage process including the mandatory tender offer which was set to open on Monday and close on January 18. A new date will now be set for the offer after the deal receives approval from the capital markets regulator Securities and Exchange Board of India and the Competition Commission of India, said the source.

United Spirits, which is currently controlled by Indian businessman Vijay Mallya, declined to comment on the open offer. "The initial timings were clearly outlined as indicative only," a Diageo spokeswoman said in London.

"We continue to work towards our initial timeline, which would see the transaction completing in Q1 2013," she said. Shares in USL ended down 1.2 per cent at Rs 1,914.25 on Monday, higher than Diageo's offer to minority shareholders of Rs 1,440 a share.

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