With this share purchase, Heineken’s shareholding in United Breweries has increased to 61.50% from 46.50%
United Breweries Ltd witnessed a series of block deals on the exchanges on Wednesday, with around 39.64 million shares, comprising 15% stake in the company, changing hands, Bloomberg reported. Details of the sellers were not available.
Heineken NV has announced that it has bought an additional 39.64 million shares in United Breweries Ltd. With this share purchase, Heineken’s shareholding in UBL has increased to 61.50% from 46.50%.
United Breweries shares were currently trading at ₹1,430 on the BSE, down 1.83% from the previous close.
“(It) is positive and indicates its commitment and interest in UBBL and the Indian beer market. SEBI approval exempts Heineken from making an open offer. In our view, this may also exempt Heineken from an open offer, if it intends to acquire the balance 11% UB Group stake pledged with banks, whenever it is approved for sale,” said Emkay Research in its report.
“The increase in ownership may drive higher involvement and support from Heineken. But UBBL is an efficiently run company with market leadership, stronger profitability vs. peers and access to Heineken’s portfolio. Hence, we don’t see material benefits in the medium term”, the Emkay report added.
On Tuesday, the Competition Commission of India approved Heineken’s additional equity stake acquisition in United Breweries.
Despite the steep sales decline in FY21, driven by covid restrictions, United Breweries has made sustained investment behind brands and increased footprint for premium brands.
Recent annual report also indicates investments in value brands to grow the category, substantial savings in fixed costs, and increase in initiatives for water conservation and carbon footprint reduction.
Emkay has marginally tweaked its estimates. The brokerage firm expects its first quarter will be weak due to lockdown but expects a faster recovery against FY21 given benign taxation, earlier on-trade reopening and ongoing vaccination. Valuations at 49x FY23 EPS are still attractive given upside risks to earnings from faster recovery and positive regulatory changes, the brokerage firm adds. It has maintained a buy rating on the stock and raised target price to ₹1570.
Earlier the debt recovery tribunal at Bengaluru has allowed the sale of shares pledged to lenders of Kingfisher Airlines in a bid to recover loans. According to 7 June order, the tribunal allowed lenders to sale of 39.6 million shares of United Breweries, 25 lakh shares of United Spirits and 22 lakh shares of McDowell Holdings via block deals on 23 June.
In a separate order, the tribunal also announced sale of another 1 crore shares of United Spirits on 25 June.
The value of the pledged shares according to current market price works out to nearly ₹6480 crore. This will help lenders led by State Bank of India to recoveries against loans from Kingfisher Airlines. The other banks include PNB, IDBI Bank and Bank of Baroda. The airline grounded in 2012 and lenders attempting to recover their dues since then