CNBC-TV18s Managing Editor, Udayan Mukherjee : If the reported news about United Spirits (Japan's Suntory eyes stake in United Spirits, others like Diageo, Pernod Ricard and Bacardi also in the race) is correct, then you need to be very optimistic. But I suspect that the reported news may not have got the valuations right because the report suggests that it is a USD 6 billion valuation for United Spirits, the current marketcap is about USD 3 billion. So it would be a very big stretch if United Spirits did a deal on its treasury stock at double the market price in these market conditions. May be the price is not right but it is entirely conceivable that our large global major, whoever it is, it would be interested in picking up just 15% of United Spirits.
It is one of the world’s largest spirit plays now, not just in India and I am sure Vijay Mallya will strike out a very healthy premium on current market price.
The high for the year is Rs 2,200 and not too much has happened in terms of the trajectory of the business going down for liquor. It has fallen with the rest of the market to Rs 1,300 unchanged. So I won’t be surprised if the price which is struck is somewhere between the current market price and the highs for United Spirits. It is a good franchise, it is a good global franchise and deal should be done quite easily
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