Battle to acquire management control of Mangalore Chemicals heats up; Zuari Fertilisers-led group makes counter offer

Saroj Poddar-controlled Zuari Fertilisers and Chemicals has joined hands with United Breweries (Holdings) Ltd and its associates Kingfisher Finvest India Ltd and McDowell Holdings Ltd to make a counter open offer to buy controlling equity stake in Mangalore Chemicals and Fertilizers Ltd from the public shareholders of the company.

The group led by Zuari Fertilisers has decided to acquire 30.8 million equity shares representing 26 per cent stake of UB Group-promoted Mangalore Chemicals at Rs 68.55 per share, which is around 9 per cent higher than the offer made by Pune-based Deepak Fertilisers and Petrochemicals Corp Ltd (DFP).

At this price, Zuari Fertilisers and other companies participating to buy stake through the open offer will have to shell out around Rs 211 crore, if fully subscribed. 

Earlier this month, DFP made an unsolicited open offer, increasing its price for a 26 per cent equity stake in Mangalore Chemicals to Rs 63 per share from its previous offer of Rs 61.75 per share to take over the company run by liquor baron Vijay Mallya’s UB Group.

It had recently bought additional stake in the company at Rs 63 per share and that automatically mandates a revised price.

Currently, UB Group owns a 22 per cent equity stake in Mangalore Chemicals and  Adventz group's Poddar holds 16.43 per cent stake.

Meanwhile, DFP had raised its holding through a market transaction a few days ago which pushed up its ownership in Mangalore Chemicals from 24.46 per cent to 26.1 per cent. DFP had last July bought 24.46 per cent stake in Mangalore Chemicals for around Rs 180 crore via open market through its subsidiary SCM Soilfert.

This came after Saroj Poddar-led Adventz Group firm Zuari Fertilisers and Chemicals Ltd came into pick a minority stake in Vijay Mallya-promoted Mangalore Chemicals. Poddar was seen as a white knight to protect Mallya’s hold over the company given that much of promoter holding was pledged with institutions. 

In an earlier interview with the Mint, he had also said that he wouldn’t make a hostile bid to wrest control of Mangalore Chemicals from his friend Mallya.  

Ambit Corporate Finance Pvt. Ltd and ICICI Securities Ltd are running the open offer for Zuari and UB Group.

Shares of Mangalore Chemicals were trading at Rs 71.55 per share in mid-day trading, up 1.56 per cent from their previous close on the BSE on Tuesday, in a strong Mumbai market. The stock is trading higher than the offer price made by the two companies.

In the quarter ended December 31, 2013, Mangalore Chemicals reported almost a five-fold rise in net profit to Rs 27.96 crore, with revenues rising 21 per cent to Rs 840.5 crore over the same period in the previous financial year.

(Edited by Joby Puthuparampil Johnson)

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