Thursday, December 11, 2008

Rich Brew For United Breweries Equity Purchase - Dec 11, 2008

Meanwhile, the BSE Sensex was up 39.20 points, or 0.41%, to 9,694.10.On BSE, 20,374 shares were traded in the counter. The stock had an average daily volume of 45,104 shares in the past one quarter.The stock hit a high of Rs 93.90 and a low of Rs 84.80 so far during the day. The stock hit a 52-week high of Rs 383.24 on 17 January 2008 and a 52-week low of Rs 76 on 8 December 2008.


The mid-cap stock had underperformed the market over the past one month till 10 December 2008, declining 19.70% as compared to the Sensex's decline of 8.36%. It had also underperformed the market in the past one quarter, declining 53.27% as compared to the Sensex's decline of 34.15%.The company's current equity is Rs 24 crore. Face value per share is Rs 1.

The current price of Rs 90.05 discounts the company's Q2 September 2008 annualized EPS of Rs 0.86, by a PE multiple of 104.71.The possibility of a payout may signal a thaw in the relationship between Heineken and United Breweries (UB). Despite being an equal shareholder, Heineken does not enjoy any management or business rights in UB. Scottish & Newcastle (S&N). It may be recalled that Heineken got control over 37.5% stake UB after a global buyout of Scottish & Newcastle (S&N).

UB has insisted that its business ties with S&N were specific in nature and not extended to Heineken. It had, in fact, moved the Bombay High Court to restrain Heineken from accessing any rights that were conferred to S&N, and also objected to Heineken’s group arm Asia-Pacific Breweries (APB) running parallel operations in the country.United Breweries' net profit fell 51% to Rs 5.16 crore on 28.7% increase in net sales to Rs 361.12 crore in Q2 September 2008 over Q2 September 2007.United Breweries is engaged in production, purchase and sale of beer.

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