Sebi allows Diageo to sell USL assets after open offer

The Diageo deal is crucial for Vijay Mallya and his UB Group, burdened with a debt of `22,999.11 crore as of 31 March 2012. Photo: Mint

Seeking clearance to sell assets after stake buy is not common, as Diageo is acquiring USL’s equity, not assets

 Live Mint :Anirudh Laskar  |  P.R. Sanjai  Mon, Mar 11 2013. 11 38 PM IST

Mumbai: India’s stock market regulator has approved UK-basedDiageo Plc’s proposal to acquire a majority stake in Vijay Mallya-runUnited Spirits Ltd (USL) for $2 billion (Rs.10,860 crore today), with the unusual inclusion of a key clause that will allow the buyer to sell the assets of the company.

The Securities and Exchange Board of India (Sebi) approved on 5 February the clause in the open offer document of USL that enables the sale of the company’s assets and investments by Diageo within two years. This will be subject to shareholder approval, said two persons with direct knowledge of the matter.

On 31 December, USL had net fixed assets of at least Rs.2,000 crore and another Rs.6,000 crore in various other assets.

“Diageo has to take prior approval from USL shareholders through a special resolution to sell USL’s assets. The merchant banker had sought a clearance to allow Diageo to sell USL’s assets after the open offer with just a board approval. Sebi has modified that,” one of the two persons said. JM Financial Institutional Securities Pvt. Ltd is the merchant banker to the deal.

Sebi declined to comment for the story.

Diageo made the applications through its adviser and hence all questions should be directed to JM Financial, said Prakash Mirpuri, vice-president (corporate communications) at UB Group, of which USL is a part. “We are unable to comment,” Mirpuri added.

Diageo executives did not offer any comment for the story. JM Financial also declined comment.

Seeking regulatory clearance to sell assets after an equity stake acquisition is not common, according to analysts and investment bankers, as Diageo is acquiring USL’s equity and not assets. In an asset-acquisition deal, the acquirer gets immediate rights over the target firm’s assets, but that’s not the case in stake sales.

In an equity deal, the acquirer gets voting rights, management control and board representation. In such a deal, the acquirer can sell the assets of the target company two years after the takeover, and even for that it needs the approval of the board as well as shareholders.

“Asset stripping is not common—that too within two years of open offer. Diageo may plan to sell those assets of USL that are non-core to Diageo’s global business,” said the head of equity capital markets at a large overseas investment banking firm on condition of anonymity.

A senior analyst tracking USL, who didn’t want to be named, said Diageo may want to sell non-core assets such as sporting assets and real estate.

The deal is crucial for Mallya and his UB Group, burdened with a debt of Rs.22,999.11 crore as of 31 March 2012.

The particular clause in the open offer document reads: “The acquirer and the PACs (persons acting in concert) currently do not have any intention to alienate, whether by way of sale, lease, encumbrance or otherwise, any material assets of the USL group during the period of two years following the completion of the offer, except in the ordinary course of business…with the prior approval of the board of directors of the target (USL) as being in the interest of the USL group, or by way of alienation of material assets of the USL group that are determined by the board of directors of the target as being surplus and/or non-core.”

It goes on: “It shall be the responsibility of the board of directors of the target or of any of its subsidiaries to make appropriate decisions in these matters in accordance with the requirements of the business of the USL group...if the acquirer and the PACs intend to alienate any material asset of the USL group, within a period of two years from completion of the offer, the target shall seek the approval of its shareholders.”

Sebi had initially questioned the intention of the acquirer, but later cleared the open offer application on condition that such a sale can happen only after USL’s shareholders approve it.

The world’s largest liquor firm and makers of Johnnie Walker scotch whiskey and Smirnoff vodka, Diageo agreed to acquire 53.4% of USL in November. It is buying a 27.4% stake in USL, including 19.3% from Mallya, for £660 million (around Rs.5,353 crore today), and pumping in fresh equity.

The British distiller agreed to follow up the purchase with an open offer to buy 26% of USL from public shareholders at Rs.1,440 per share—the price paid for the direct purchase.

Diageo was originally scheduled to start the open offer on 7 January, but it was postponed as both Sebi and the Competition Commission of India (CCI) had sought more information related to the transaction. CCI cleared the proposal on 28 February.

Mallya is expected to use part of the proceeds of the Diageo deal towards debt repayment and equity infusion in Kingfisher Airlines Ltd, grounded since 1 October.

In mid-February, lenders to Kingfisher Airlines said they had decided to recall all loans given to the airline, kicking off the process for the recovery of Rs.7,000 crore in debt.

No more typing: Google search to become like ‘Star trek’ computer

by FP Staff Mar 11, 2013

We’ve already started seeing Google voice search thanks to its various JellyBean devices, but this is just the beginning as far as the search engine giant is concerned.

The company which is known for its hugely ambitious projects (Read cars that drive themselves and Google glass), has nothing less than a space-age level vision for the future of its search engine.

“The destiny of search is to become that ‘Star Trek’ computer and that’s what we are building. You can walk up to a computer and say, hey, computer..” said Google’s Search Head Amit Singhal at the ongoing South by South West (SXSW) Interactive, reported ABC News.

For those of you not familiar with the Star Trek computer, here’s a quick clip of it in action:

The revelation by Google is however, not new. John Giannandrea, Director of Engineering at Google, is the man tasked with making the Star Trek computer come to life, and is responsible for ‘The Knowledge graph’ which attempts to provide results for search queries like “Leonard Nimoy” using answers like an image, life blurb, birthday, height, notable works, and related people reported The Verge.

In an interview with the website he said that ‘voice easily accessible’ search was the future and dismissed theories that search tools were making people stupider. “Captain Kirk is a smart guy, even if he has to ask the computer for things every five minutes. If the information is that easy to access, then really, what’s the difference

Facebook COO Sheryl Sandberg lists the perils of being the woman boss

by Uttara Choudhury : First Post : Mar 12, 2013

New York: As Facebook’s chief operating officer, Sheryl Sandberg has smashed formidable barriers in Silicon Valley, but has noticed far fewer women rising through the ranks along with her. With her new book Lean In: Women, Work and the Will to Lead, Sandberg aims to arm women with the tools they need to keep moving forward in the workforce.

Sandberg, 43, has worked with Facebook as its No 2 since 2008. CEO Mark Zuckerberg lured her away from Google to help run what has since become a social networking powerhouse.

Of all the posters that hang on Facebook’s walls — “Move Fast and Break Things,” “Done Is Better than Perfect” and “Fail Harder” — Sandberg says her favorite asks “What would you do if you weren’t afraid?” Lean In is about pushing past fear. It urges women to shed self-imposed glass ceilings.

“Fear is at the root of so many of the barriers that women face,” she writes.

“Fear of not being liked. Fear of making the wrong choice. Fear of drawing negative attention. Fear of overreaching. Fear of being judged. Fear of failure. And the holy trinity of fear: the fear of being a bad mother/wife/daughter.”

Sandberg argues that some women step back from their jobs, derailing their ambitions early in their careers in anticipation of having a family. The book which was released on Monday has already evoked strong reactions. Some have loved the book, while others have slammed Sandberg’s approach, saying it only considers the needs of upper middle-class working women.

New York Times columnist Maureen Dowd disparaged Sandberg by calling her a “PowerPoint Pied Piper in Prada ankle boots.” But is the multi-millionaire COO of Facebook with two Harvard degrees too rich, or out of touch with the vagaries of life to offer good advice to the average working woman?

Nobel Prize-winning economist Paul Krugman doesn’t think so and defended the book on “This Week with George Stephanopoulos”. “She’s not talking about the problems of every woman. That’s okay,” said Krugman, while pointing out that the American workplace is still pretty sexist.

Women receive about six in 10 college degrees in America, but they still account for only four percent of CEOs in America’s Fortune 500 companies. Sandberg, also a director of the Walt Disney Company, says that number needs to change and encourages women to “lean in” and take action to reach the top of their professions.

Sandberg shines a light on sexism’s obscure nooks. She details the dissimilar cultural messages directed at boys versus girls. Girls are often, encouraged to be “pretty”, Sandberg explains, while smarts and leadership are left to the boys.

“When a girl tries to lead, she is often labeled bossy,” she writes. “Boys are seldom bossy because a boy taking the role of a boss does not surprise or offend.” This small remark will resonate with women who have often been put down with epithets like “Miss Bossy Boots”.

“This is deeply personal for me. I want every little girl who someone says they’re bossy to be told instead, “You have leadership skills,” said Sandberg.

The book points out men apply to jobs when they meet merely 60 percent of the listed requirements, while women wait until they meet 100 percent. Men also negotiate for higher salaries far more often than women. For example, of a graduating class of Carnegie Mellon students, 57 percent of the men initiated negotiations, compared to 7 percent of women.

“I want to be clear: I am not saying that men are too self-confident. That’s not the problem. The problem is that women aren’t self-confident enough,” says Sandberg.

Sandberg doesn’t shy away from describing her own struggles to take risks at work, to ask for what she wants, and to negotiate.

Sandberg tells women to look for supportive spouses: “Everyone knows marriage is the biggest personal decision you make. But it’s the biggest career decision you make.”

Sandberg is married to highly successful tech entrepreneur Dave Goldberg who launched his first company Launch Media at the age of 26, took it public, and then sold it to Yahoo! The couple says they split their parenting responsibilities equally, trying to make sure at least one of them is home in time for dinner with their two young children.

At Harvard, Sandberg’s economics professor Larry Summers handpicked her to follow him to the World Bank and then to become his chief of staff when he was Treasury Secretary.

 By 2001, Sanderg headed to Silicon Valley where she almost turned down a job offer from Eric Schmidt, the CEO of Google which was then a start-up. As Google’s first business unit general manager Sandberg played a key role in building Google into the $250 billion business it is today. Nothing succeeds like success and Sandberg was snapped up by Facebook’s Zuckerberg in 2008.

Finance Minister Meeting World Bank President

Finance Minister During his Meeting with the World Bank President

by Ministry of Finance, Government of India on Tuesday, March 12, 2013 at 11:14am ·

In view of the huge investment requirements in the infrastructure, social and rural development sectors in India, the Union Finance Minister Shri P. Chidambaram highlighted the need for continued and enhanced engagement of the World Bank Group with India. The Finance Minister Shri Chidambaram further emphasized the need for enhancing the capital base of the bank to meet the challenges of poverty reduction and infrastructure development in the developing countries. The Finance Minister Shri Chidambaram was speaking after Dr. Jim Yong Kim, President, World Bank Group called on him in his office here today.

Beside above, several issues concerning India’s engagement with the World Bank Group were also discussed during the delegation level meeting between the two leaders. During the meeting, issues related to global economy and its impact on Indian economy were discussed. The Finance Minister Shri Chidambaram informed the World Bank President about the challenges faced by the Indian economy at present and reforms undertaken by the Government in the recent past. It is pertinent to mention here that India is the highest cumulative borrower of World Bank of US$ 90.5 billion; with a current portfolio of 77 projects having a commitment of US$ 23.3 billion

Speaking on the occasion, Dr. Jim Yong Kim, President, World Bank informed the Finance Minister about the World Bank Group’s new agenda on global poverty reduction and shared prosperity. Dr Kim assured adequate support to India in meeting the developmental challenges being faced by the country. Minister Chidambaram and Dr. Kim discussed on options for increasing external finance for infrastructure as well as for other development needs of India.

Dr. Jim Yong Kim, President World Bank Group is on a three day visit to India from 11-13 March, 2013. This is his first visit to India in his capacity as the President, World Bank Group. Dr. Kim would also be visiting Uttar Pradesh on 12th March in order to have the understanding of the ground realities and developmental challenges faced by the State. He would also be meeting the Chief Minister of Uttar Pradesh there and would be visiting the rural side to get a glimpse of rural sector challenges and Kanpur to get a glimpse of urban sector challenges in India.