A POTENTIAL SALE?
Bloomberg also reported that RCB could be in to sell the franchise for a potential buyer who meets a USD 2 billion valuation © Sportzpics
Diageo India, an Indian branch of UK-based Diageo Plc, the owner of the Royal Challengers Bengaluru (RCB) franchise of the Indian Premier League (IPL), has categorically denied reports to sell the team. In a letter to the Bombay Stock Exchange (BSE) and BSE Surveillance Department on Tuesday (June 10), a Diageo India official has said that the media reports about its planned sale are speculative in nature.
“The company would like to clarify that the aforesaid media reports are speculative in nature and it is not pursuing any such discussion,” Mital Sanghvi, the company secretary, informed the regulating body of the Indian Stock Market. “This is for your information and records.”
The company was responding to a mail from the BSE. Diageo is registered with the Bombay Stock Exchange and it has been reported that since the talk of RCB sale has surfaced, the the shares of the Diageo-owned United Spirits, the owner of RCB, have seen an uplift.
Bloomberg reported on Tuesday that Diageo is exploring options to sell the RCB franchise. The report comes in the backdrop of RCB’s victory (on June 3) in the IPL for the first time since the inception of the league in 2008, and the subsequent tragedy in Bengaluru where 11 people died and many were left injured while celebrations of the victory were underway on June 4.
If one were to interpret the clarification provided by the company as open-ended in nature, there are many reasons attributed to the plans to sell. “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.
It has also been reported that the company has been looking at a valuation of USD 2 billion for RCB, one of the original eight teams of the league, founded by Vijay Mallya in 2008. However, the response to the valuation is mixed with the experienced administrator, quoted above, stating that is an exaggerated value. Torrent bought Gujarat Titans at a valuation of INR 7500 crore, close to 1 billion USD.
However, Lalit Modi, the creator of the IPL, explained to Cricbuzz that a 2 billion USD valuation is realistic. “I will not be surprised if it is sold for a higher price,” he said , stating that the valuation of GT cannot be compared here since it was a one-year-old deal.
The report of sale is of course speculative as mentioned by the Diageo official in his reply to the BSE. “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,” the Bloomberg report says.
RCB officials have been incommunicado since the Bengaluru tragedy. Cricbuzz has written and messaged Diageo for comments.
© Cricbuzz
