United Breweries Shares Swing After Hitting 52-Week High As Heineken Raises Stake
Shares of United Breweries Ltd. hit a 52-week high after Heineken International BV acquired an additional stake in the alcohol maker.
Heineken acquired an additional 39.6 million shares (or 15% equity) at Rs 1,471.25 apiece in United Breweries, according to data available on the BSE. With this, Heineken's shareholding in United Breweries has increased to 61.50% from 46.50%.
India’s Debt Recovery Tribunal on behalf of a State Bank of India-led lenders’ group sold Rs 5,825 crore ($783 million) worth shares in United Breweries, according to a statement by the Enforcement Directorate.
The financial crime investigator had recently transferred Rs 6,600 crore worth of shares seized by it to the lenders’ group. A further sale of Rs 800 crore worth of shares, according to the investigating agency, is expected by June 25.
Shares of the Bengaluru-based beermaker swung between gains and losses after touching a 52-week high of Rs 1,498.95 apiece. The stock was down 1.9% as of 12:45 p.m. on Wednesday.
According to Emkay Research, the share purchase is positive and indicates Heineken’s commitment and interest in United Breweries 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.
While the increase in ownership may not translate into material benefits in medium term, the brokerage said UBL seems to be in a stronger position and remains an attractive recovery play post Covid.
“Annual report indicates sustained investments in brands, increased footprint for premium brands, impressive savings in fixed costs, and initiatives for water conservation and reducing carbon footprint,” the brokerage said.
Emkay maintained ‘buy’ rating and raised target price to Rs 1,570 from Rs 1,450 apiece.
Of the 17 analysts tracking United Breweries, 13 recommend ‘buy’, while two each suggest a ‘hold’ and a ‘sell’, according to Bloomberg data. The stock is trading 3.2% below its average of 12-month price targets compiled by Bloomberg.