Diageo India flags RCB sale report as speculative in letter to stock exchange
"The company would like to clarify that the aforesaid media reports are speculative in nature and it is not pursuing any such discussion. This is for your information and records," said Mital Sanghvi.
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Diageo India, the Indian subsidiary of UK-based Diageo Plc and the owner of the Royal Challengers Bengaluru (RCB) franchise in the Indian Premier League (IPL), has denied reports suggesting it plans to sell its ownership stake in the franchise.
Diageo India clarified that the media reports regarding the alleged sale are purely speculative through a letter to the Bombay Stock Exchange (BSE) and the BSE Surveillance Department on Tuesday, June 10.
"The company would like to clarify that the aforesaid media reports are speculative in nature, and it is not pursuing any such discussion. This is for your information and records," said Mital Sanghvi as quoted by Cricbuzz.
Diageo is registered with the Bombay Stock Exchange (BSE) and has seen a rise in the shares of its Indian subsidiary, United Spirits, after speculation about the potential sale of the RCB franchise surfaced, a week after they won their maiden Indian Premier League title.
Bloomberg had reported that Diageo is exploring options to sell RCB, which increased discussions in the market on Tuesday. The news emerged after RCB secured its first-ever IPL title since the league's inception in 2008. But, the celebrations in Bengaluru turned tragic on June 4, as 11 people lost their lives and several others were injured during the victory festivities.
"Being a public company, there will be a lot of pressure on reputational damage," said a noted voice on the sports ecosystem in the country with a thorough knowledge of the IPL landscape.
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The reports indicate that Diageo is considering a USD 2 billion valuation for the RCB, one of the eight original IPL franchises founded by Vijay Mallya in 2008. There were comparisons made to the Gujarat Titans (GT), which Torrent acquired for INR 7,500 crore, approximately USD 1 billion.
But, Lalit Modi, the founder of the IPL believes that RCB's whopping USD 2 billion valuation is justified. He noted that GT's valuation was a one-year-old deal and stated that he would not be surprised if RCB is sold for an even higher price.
"No decision is final, and they may decide against selling the team, the people said, asking not to be named as the details are private," said the Bloomberg report.
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