In a surprising move amid a takeover battle for UB Group firm Mangalore Chemicals and Fertilizers Ltd (MCFL), Pune-based Deepak Fertilisers and Petrochemicals Corporation Ltd has sold a 2.2 per cent equity stake in the company just weeks after buying additional stake in the company in an open offer.
The company has offloaded over 2.6 million equity shares of MCFL, comprising about 2.2 per cent equity stake, through various open market transactions last month, as per a stock market disclosure.
Following the sale, the holding of Deepak Fertilisers in MCFL has decreased to 29.05 per cent from 31.25 per cent. The company holds this stake through its subsidiary SCM Soilfert Ltd.
An email query to Deepak Fertilisers’ spokesperson seeking a reason for the stake sale did not elicit any response by the time of filing this article.
Deepak Fertilisers’ battle for taking control of Mangalore Chemicals started in July 2013 when its arm SCM Soilfert bought some stake in the firm and offered to acquire around 26 per cent stake in the company through a hostile takeover bid.
Following this, Saroj Poddar came in as a white knight to protect Mallya’s hold over the company given that much of promoter holding was pledged with institutions.
In May 2014, Deepak Fertilisers hiked the offer price in its unsolicited open offer, increasing its price for an additional 26 per cent equity stake in Mangalore Chemicals to Rs 63 per share from its previous offer of Rs 61.75 per share.
Vijay Mallya joined hands with Poddar’s Adventz and together the two launched a rival joint open offer for Rs 68.55 per share.
As per the pact between UB group and Zuari Industries had signed earlier, Mallya would have been remained chairman on the board of Mangalore Chemicals if they jointly succeed to acquire controlling stake via an open offer.
However, this was tweaked recently after United Bank of India declared Mallya as a wilful defaulter on account of non-payment of dues. Mallya recently stepped down from the board.
In September, Deepak Fertilisers upped its offer price to Rs 93 per share from its previous offer. This allowed it to garner additional 6 per cent stake taking its ownership to over 31 per cent.
Currently, UB Group owns a 22 per cent equity stake and Saroj Poddar's Adventz group holds 16.47 per cent stake. Deepak Fertilisers is the single-largest shareholder.
Last month, Poddar came out with a fresh open offer to purchase over 30.7 million equity shares, comprising 26 per cent stake, in MCFL at a share price of Rs 91.92 each, 33 per cent more than what it had offered in its recently concluded offer which failed to garner many takers.
Earlier last week, Saroj Kumar Poddar-controlled Zuari Fertilisers and Chemicals Ltd and Zuari Agro Chemicals Ltd revised their open offer size for shares in MCFL to additional 36.56 per cent stake. Zuari group, however, retained the price for open offer at Rs 91.92 per share.
With this, Saroj Poddar will have to shell out up to Rs 398 crore against Rs 282 crore earlier to get near majority stake in MCFL.
(Edited by Joby Puthuparampil Johnson)