United Spirits Ltd. (UNSP), the Indian whiskey maker controlled by Vijay Mallya, fell the most in eight months in Mumbai trading on speculation that discussions to sell a stake to Diageo Plc. (DGE) could fall through.
United Spirits shares fell 9 percent to close at 1095 rupees, the biggest decline since Feb. 22. The stock was the biggest loser on the 10-member BSE Fast-Moving Consumer Goods Index.
“I do not have to do a deal with Diageo at all. I am under no compulsion whatsoever,” Reuters quoted Mallya, the alcohol company’s chairman, as saying in a report over the weekend.
Diageo in September said it is in talks to buy a stake in United Spirits, a deal that would help the world’s biggest distiller build its presence in the Indian whiskey market. United Spirits shares have more than doubled this year on expectations of a deal with the U.K.-based company.
“It’s more of the rumors about the deal with Diageo not going through,” said Ganesh Ram, an analyst at Kim Eng Securities. “The deal is important from the United Spirits perspective because it would give them the edge of reducing debt as well as the edge of new premium brands.”
Mallya has held discussions with Diageo on United Spirits amid troubles at his cash-strapped Kingfisher Airlines Ltd. (KAIR), which had its license suspended following a strike. The airline has said it plans to resume flights in the next few weeks after employees agreed to return to work. Kingfisher Airlines shares rose 3.5 percent to close at 11.75 rupees.
United Spirits’ spokesman Prakash Mirpuri could not be reached on his mobile phone.
To contact the reporter on this story: Malavika Sharma in New Delhi at email@example.com
To contact the editor responsible for this story: Stephanie Wong at firstname.lastname@example.org