Steel-to-power conglomerate JSW Group is in advanced talks with global drinks giant Diageo Plc to acquire the Indian Premier league (IPl) franchise Royal Challengers Bangalore for an amount that can go upto `300 crore.
“Yes, we are in negotiation with Diageo to acquire RCB for `250 crore to `300 crore,” JSW Group sources said on Wednesday.The RCB franchise, which is now eight IPl seasons old, is a wholly owned subsidiary of United Spirits limited (USl), in which Diageo has a majority stake. Talks have been going on for a long time but the deal couldn’t come through because of the public spat between Diageo and former promoter Vijay Mallya over alleged diversion to Kingfisher and their UB Group entities.
The spat came to light when a full-blown boardroom battle broke out after USl said it had “lost confidence” in Mallya after an internal probe and a forensic inquiry by PWC revealed alleged fund diversion to Kingfisher and other UB group entities.
JSW Steel chairman Sajjan Jindal confirmed that his group is acquiring an IPl side but stopped short of naming it. "Cricket is the number one sport in our country so there is an idea to acquire a team... An IPl team. But, I cannot comment which team would be," said Jindal.
"...Moneywise I don't think that is the issue (because), the idea is that we want to take some credible team so that we can promote sports," Jindal said.
On a specific question of whether the steel giant will indeed buy RCB, Jindal neither denied nor confirmed it, saying "That depends on them (RCB)."
RCB is one of the most attractive teams in IPl despite not winning the title.
RCB, which was bought by Mallya for $111.6 million in 2008, the second most expensive team after Mukesh Ambani’s Mumbai Indians then, have star-studded players in the form of AB De Villiers, Virat Kohli and Chris Gayle.
JSW Sports, a JSW Group wing, is owner of Bengaluru FC, one of the I-league teams led by Indian football team's captain Sunil Chhetri.
Asked about the reason for entering IPl despite major controversies around the tournament, including the 2013 spot-fixing scandal, company sources attributed it to its popularity.
If the deal is struck, RCB will be the second team after Deccan Chargers, to undergo change in ownership. The BCCI terminated Deccan Chargers for failing to give `100 crore Bank Guarantee to the Board as directed by the Bombay High Court. Thereafter, Sunrisers Hyderabad replaced the Deccan Chargers in 2013.
RCB has made two final appearances in IPl, in 2009 and 2011. The team had also finished runners-up in the 2011 Champions league T20. In the last IPl earlier this year, RCB finished third.
Jindal said they will also focus on other sports like kabaddi and hockey. "We will focus on other sports also. We are looking at Kabaddi, we are looking at hockey, we also want to go pan-India in various sports through JSW Sports, which is the wing of JSW Group," he said.
Jindal said the company was running clubs that promote various sports. "We have a football team and we are building a village for sports in Karnataka," he added.