The agreement was struck at a small premium to Tuesday’s closing share price, and the stock was trading near a record high, demonstrating Heineken’s urgency to finalise the purchase.
A major block purchase in United Breweries Ltd was completed on Wednesday morning at a price of 1471.25 per share. According to reports, the company’s promoter, Heineken, was the buyer. Heineken’s share in United Breweries Ltd would have grown by 15% to 61.5 percent as a result of this acquisition.
According to analysts, the acquisition demonstrates Heineken’s faith in United Breweries as well as the Indian beer industry. The purchase was struck at a small premium to Tuesday’s closing share price, and near a record high for the company, demonstrating Heineken’s urgency to complete the transaction.
It’s worth noting that when a seller makes a major block deal, the shares are usually sold at a discount of about 5-7 percent. It’s worth noting that Heineken is buying the shares from the Debt Recovery Tribunal (DRT), which is attempting to recoup debts owed to the Vijay Mallya Group, the company’s former promoter.
“The greater shareholding may result in higher engagement and assistance from Heineken,” analysts from Emkay Global Financial Services Ltd said in a research published on June 23. United Breweries, on the other hand, is a well-run firm with access to Heineken’s global portfolio. As a result, we don’t expect any tangible gains right away.”
As a result of the 15 percent equity purchase, market regulator Sebi has excused Heineken, a promoter business, from making an open offer to United Breweries shareholders.
Meanwhile, the covid-19 epidemic has had a significant influence on financial year 2021 (FY21) earnings. Revenues in FY21 fell by as much as 35% compared to the same period previous year, reaching Rs 4241 crore.
Unfortunately for investors, the second covid wave will also have a negative impact on the June 2021 quarterly results. Even so, this time around, the recovery is expected to be quicker. According to Emkay’s analysts, “we see a speedier rebound than the first lockout due to benign taxation, early re-opening of on-premise, and continuing vaccination.”
On Wednesday, shares of United Breweries set a fresh 52-week high on the National Stock Exchange (NSE), but later gave back part of those gains. According to Bloomberg, the stock trades at roughly 50 times projected earnings for the fiscal year 2023. From a short-term viewpoint, higher valuations may prevent strong upsides.
United Breweries Ltd saw a series of block transactions on the markets on Wednesday, with roughly 39.64 million shares, or 15% of the firm, changing hands, according to Bloomberg. The vendors’ information was not accessible.
United Breweries Ltd has stated that Heineken NV has purchased an additional 39.64 million shares. Heineken’s stake in UBL has grown to 61.50 percent from 46.50 percent as a result of this share transaction. On the BSE, United Breweries shares were trading at 1,430 rupees, down 1.83 percent from their previous close. “(It) is encouraging and demonstrates the company’s commitment to UBBL and the Indian beer industry. Heineken is excluded from making an open offer due to SEBI clearance.
