India's United Spirits could attract more buyers for its Whyte & Mackay Scotch whisky business if it included single malt Dalmore. Selling Dalmore could tip the price over the expected £450 million ($735 million), sources told Reuters.
According to the report, the sale of most of Whyte & Mackay was offered last month by alcoholic beverages company Diageo PLC to appease UK regulators. The British competition watchdog is concerned that Diageo's purchase of a controlling stake in United Spirits would hurt competition in the country's Scotch market.
Reuters, citing Bernstein Research analyst Trevor Stirling, said that the deal value is expected to be in the area of £450 million. This is based on Whyte & Mackay's earnings before interest, tax, depreciation and amortization of £45 million in 2013.
One source said that if Dalmore was included, any buyer would likely pay a higher multiple. A multiple of 15 would yield a price of £675 million ($1.1 billion), the report said.
United Spirits will run the sale process and is currently interviewing banks to advise on it. Sources speculate that a formal process for the sale will kick off in January, Reuters said.
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