India's largest spirits company United Spirits Ltd (USL), which acquired a 54 per cent stake in Pioneer Distilleries, has made a public offer to acquire another 20 per cent equity in the company.
The acquisition will take United Spirits' holding in the Maharashtra-based distillery to nearly 75 per cent.
The Vijay Mallya-led USL had on Tuesday entered into an agreement to buy a majority stake in Pioneer Distilleries for about Rs74 crore, which will help it raise its distillation capacity.
USL had already acquired 54.7 per cent stake in Pioneer Distilleries, a primary distillation unit.
United Spirits has offered to acquire 2,677,640 equity shares from the existing shareholders of Pioneer Distilleries, other than the promoters, representing 20 per cent of the voting rights of its equity.
The acquisition is being made at a price of Rs101 per equity share, payable in cash. The offer is about 46 per cent above Monday's closing price of Rs69.05 of Pioneer Distilleries on the Bombay Stock Exchange.
The offer will open for subscription on 10 November 2010 and close on 29 November, United Spirits said in its release.
United Spirits' in house capacity of primary spirit distillation will go up to 22.5 per cent of its requirements and provide further supply side security. This will help United Spirits reduce its dependence on buying raw material, extra neutral alcohol (ENA), by about 12 per cent.
Pioneer Distilleries has a 160 kilo litre per day (klpd) spirit facility in Nanded, Maharashtra, comprising an active 100 klpd molasses-fed plant and a 60 klpd grain-fed plant under commissioning. PDL also has a 30 klpd absolute alcohol plant as also a letter of intent for bottling of IMFL from grain.