Diageo and USL offer to buy Pioneer Distilleries

Pursuant to acquisition of 25 per cent stake in United Spirits (USL), UK-based liquor company Diageo Plc through its Netherlands subsidiary Relay B V,  and USL made an open offer on Thursday to shareholders of  USL subsidiary Pioneer Distilleries (PDL), to acquire 24.66 lakh shares at a price of Rs 64.02 per share aggregating to Rs 15.78 crore.

The details of the offer were communicated by PDL in a regulatory filing to the BSE.

USL had acquired PDL in May 2011 and currently holds 81.58 per cent of its equity share capital.

The open offer to PDL shareholders comes after Diageo became promoter entity of USL, acquiring 25.02 per cent stake through a mix of open offer, preferential allotment and purchase from UB group entities as part of its November 2012 deal.
If the open offer goes through, USL along with Relay will end up holding 100 per cent stake in PDL.

The draft offer letter will be filed with market regulator Sebi on July 18. The offer will open for shareholders on August 28, 2013 and close on September 11. The acquirers could revise the offer, depending on the response, on August 22.
PDL had reported income of Rs 103.66 crore and negative net worth of Rs 30.60 crore as on March 31, 2013.

In its filing, PDL said that it made a reference to Board for Industrial and Financial Reconstruction (BIFR) under  Sick Industrial Companies (Special Provisions) Act following “erosion of entire net worth.” The BIFR at its hearing on May 28, 2013 issued directions to statutory authorities to file their objections on the sickness of PDL within two weeks from May 28 and fixed the next hearing on July 31, 2013, the filing added. PDL shares closed at Rs 62.30 on the BSE, up 0.56 per cent from the previous close.