Takeover battle for Mangalore Chemicals not ended yet; Saroj Poddar makes another offer

Saroj Kumar Poddar-controlled Zuari Fertilisers and Chemicals Ltd and Zuari Agro Chemicals Ltd have made another offer to hike holding in UB Group firm Mangalore Chemicals and Fertilizers Ltd (MCFL) from the public shareholders through a new open offer, according to a stock market disclosure.

The Zuari group companies have offered to purchase over 30.7 million equity shares, comprising 26 per cent stake, in Mangalore Chemicals at a share price of Rs 91.92 each, 33 per cent more than what it had offered its its recently concluded offer which failed to garner much shares.

It may have to shell out as much as Rs 282.2 crore (about $45.6 million) to acquire the stake if fully accepted.

MCFL shares ended the day at Rs 90.85 a piece, up 5.46 per cent in a weak Mumbai market on Friday. The offer was made after trading hours on Thursday.

The latest open offer, which is voluntary in nature and is not subject to any minimum level of acceptance, has been launched without participation of UB Group’s associate companies as UB Group chairman Mallya was recently declared as a wilful defaulter by some lenders.

ICICI Securities Ltd will manage the open offer for Adventz Group.

The latest open offer comes just a month after Deepak Fertilizers and Petrochemicals Corp Ltd managed to acquire another 5.94 per cent stake in MCFL through a revised open offer at Rs 93 a share.

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.

Deepak Fertilisers’ battle for taking control of Mangalore Chemicals started in July last year when its arm SCM Soilfert offered to acquire around 26 per cent stake in the company.

In May, 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.

Following this, Saroj 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.

The liquor baron 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.

In September, Deepak Fertilisers upped its offer price to Rs 93 per share from its previous offer price of Rs 63 per share. This allowed it to garner additional 6 per cent stake taking its ownership to 32 per cent.

Earlier this week, Mallya, who is promoter director and chairman of Mangalore Chemicals stepped down from its board. Meanwhile, his step mother Ritu Mallya has been named as director of the company with immediate effect.

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