Mangalore Chemicals and Fertilizers Ltd investors tender 2.6 per cent stake to Deepak Fert

Written by PTI | New Delhi | Updated: Oct 20 2014, 20:38pm hrs
MCFLAmid a prolonged takeover battle for MCFL, the fertiliser firm's two investors, including Morgan Stanley (Reuters)
Amid a prolonged takeover battle for MCFL, the fertiliser firm's two investors, including Morgan Stanley, have tendered shares to the tune of 2.6 per cent stake in the company to Deepak Fertilisers.

The takeover battle for Mangalore Chemicals and Fertilizers Ltd (MCFL), which is going on for quite sometime further intensified last month after Deepak Fertilisers raised its open offer price to Rs 93.60 per share.

This was hours after rival Zuari group in association with MCFL'S original promoters UB group revised their open offer price to Rs 81.60 per share.

Today, October 20, is the last day for open offers of both the companies.

Karnataka State Co-operative Marketing Federation, which is the third largest non-promoter shareholder after Deepak and Zuari with 27,06,834 shares equivalent to 2.28 per cent stake in the company, has decided to tender its shares to Deepak Fertilisers, according to sources.

Another institution Morgan Stanley which currently holds about 4.50 lakh shares in the company has also decided to tender their shares to Deepak Fertilisers, sources added.

Aditya Birla Money Head - Equity Research - Vivek Mahajan said, "MCFL takeover battle has reached the final leg. The offer price is unlikely to be revised as per SEBI formula. The offer of Zuari Agro along with Vijay Malya is at Rs 81.6...."

"Deepak Fertilisers (DFPCLs) offer of Rs 93.6 is stretched valuations and there is no possibility of revision in the price as per SEBI regulations, investors are likely to lap up this one time opportunity to exit the stock, Mahajan added.

The battle for MCFL between Deepak Fertilisers and Zuari Group was triggered in April 2013 when the latter bought about 10 per cent stake in MCFL through open market.

Later, Deepak Fertilisers acquired 24.46 per cent stake in MCFL in one go in July 2013. After this, Zuari group had increased its stake to 16.43 per cent in the same month.

The battle for control of Mangalore Chemicals heated up again after the Competition Commission of India (CCI) cleared an open offer launched by Zuari Group firms on September 4. The CCI had cleared the open offer of Deepak Fertilisers on August 19.

After this, both parties have announced that the open offer will start on October 1 and close on October 17. The last date for upward revision of the offer size or price was September 25.

At present, Deepak Fertiliser holds 25.31 per cent stake in MCFL, whereas consortium of Zuari group companies have 16.43 per cent stake and Vijay Mallaya's UB group 21.97 per cent stake.

The Zuari group along with Vijay Mallaya's UB group needs about 12 per cent additional stake in MCFL to take control of the company while at the same time Deepak Fertilisers would require another about 25 per cent stake in the MCFL.

Zuari Agro Chemicals had also entered into an agreement this year to use Mangalore Chemicalss facilities for contract production.