As the battle for control of Mangalore Chemicals & Fertilizers Ltd (MCFL) hots up, Deepak Fertilisers Chairman Sailesh Mehta today hinted he was open to discussions with the rival alliance of Vijay Mallya and Saroj Poddar of the Zuari Group.
Mehta’s comments come two days after Mallya’s UB Group joined hands with the Zuari group to ward off a hostile takeover bid by Deepak Fertilisers for MCFL. The duo proposed to buy an additional 26 per cent stake in MCFL at rates 9 per cent higher than what Deepak Fertilisers offered. ”
Mr Saroj Poddar and Dr Mallya are all respected persons…and there is always somewhere room for discussions to look at how MCFL unit and its growth is not compromised at any moment,” Mehta said after a company board meeting. Asked about financing the takeover bid, Mehta said funding is not an problem and Deepak Fertilisers’ balance sheet is very strong.
Profit surged more than three-fold to Rs 91.44 crore in the fourth quarter ended March 31, the company said in a statement today.
“We are in discussions with our merchant bankers over this counter offer issue,” President and Chief Financial Officer Somnath Patil told PTI. The company has a few weeks to match or better the open offer.
UB and Zuari, two key shareholders in MCFL, came together this week, marking the next stage of a bitter battle between the Zuari group and Deepak Fertilisers to wrest control of the UB Group company, which has been on for over a year. Their counter offer was made less than a month after Deepak Fertilisers raised its stake in the firm and made an open offer to buy an additional 26 per cent at Rs 63 per share, totalling Rs 194 crore.
The Zuari group, which holds a 16.43 per cent interest in MCFL, teamed up with the UB Group on May 13 and offered to buy a 26 per cent stake for Rs 68.55 apiece for a total of Rs 211.22 crore. The UB Group holds 21.98 per cent stake in MCFL. For the new-found partners, Zuari Fertilisers, Zuari Agro Chemicals, United Breweries (Holdings), Kingfisher Finvest India and McDowell Holdings offered to acquire about 3.08 crore shares.
MCFL shares fell 1.05 per cent to Rs 70.85 at the close on the BSE today.
In a hostile takeover bid, Deepak Fertilisers raised its stake in MCFL to 25.31 per cent from 24.46 per cent on April 23 and offered to buy another 26 per cent.
The accord between Zuari and UB Group triggered their open offer, which Zuari Fertilisers and Chemicals will fund, MCFL said in a filing on May 13. The two groups entered into an agreement in relation to their shareholdings in MCFL and they “intend to exercise their combined voting rights in concert towards key decisions relating to the company,” according to the filing.
The battle for MCFL started in April last year when Zuari Fertilisers bought about 10 per cent in the company from SBI group entities and the open market. Deepak Fertilisers followed with the continued…
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