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Diageo’s Open Offer For More USL Shares Attracts Few Takers

May 15, 2013

After agreeing to acquire 27.4% of India’s United Spirits Ltd. (USL) last November, Diageo had hoped to add another 26% through an open offer which closed April 26. Instead, the offer netted the drinks giant just an additional 0.4%, a stock exchange filing revealed. USL shareholders had little incentive to sell, because since Diageo announced its open offer price of 1,440 rupees ($26.28) a share last year, USL’s stock price has risen to around 2,300 rupees a share.

Despite the tepid response to the open offer, Diageo says it will still effectively control USL through its existing stake and the voting and management rights it acquired under the terms of last year’s deal.

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