Diageo Addresses RCB Sale Speculations Following IPL Victory
Clarification on RCB Sale Rumors
Just days after the Royal Challengers Bengaluru (RCB) celebrated their first Indian Premier League (IPL) victory against Punjab Kings in Ahmedabad, rumors regarding the potential sale of the franchise began circulating. However, Diageo India, the parent company of RCB and a subsidiary of the UK-based Diageo Plc, quickly dispelled these speculations.
In a statement to the Bombay Stock Exchange (BSE) and its Surveillance Department on Tuesday, Diageo clarified that the reports concerning a sale were unfounded. The company asserted that no discussions regarding such a transaction were taking place.
“The company would like to clarify that the aforementioned media reports are speculative in nature and it is not pursuing any such discussion. This is for your information and records,” the statement read.
These clarifications came in response to a Bloomberg report suggesting that Diageo had engaged in preliminary talks with advisers about potentially selling part or all of the RCB franchise, with a speculative valuation of up to $2 billion. Diageo holds ownership of RCB through its Indian subsidiary, United Spirits Ltd.
Following the speculation, shares of United Spirits surged by 3.3% on the Mumbai stock exchange on Tuesday morning, reaching a five-month high. This spike drew the attention of regulators, prompting Diageo to issue a formal notification to the BSE. Company Secretary Mital Sanghvi emphasized the company's obligation as a BSE-registered entity, especially since the unverified news had a direct impact on share prices.
The timing of these developments coincided with heightened scrutiny of RCB after a tragic stampede occurred in Bengaluru. On June 4, during a city-wide celebration of the team's IPL victory, approximately 250,000 fans gathered at the M. Chinnaswamy Stadium. What was intended to be a festive event turned chaotic, resulting in 11 fatalities and 56 injuries due to the stampede.
The incident has raised concerns regarding event management protocols and has increased pressure on the franchise's ownership, drawing public and administrative focus on safety measures.