Zuari Fert joins with Mallya's UB in fresh offer for Mangalore Chem control

The battle to acquire control of the troubled Mangalore Chemicals & Fertilizers Ltd has just got hotter, with the Saroj Poddar-led Zuari Fertilisers and Chemicals Ltd announcing that it has joined hands with Vijay Mallya's United Breweries (Holdings) Ltd and its associates Kingfisher Finvest India Ltd and McDowell Holdings Ltd to launch a counter open offer.

The group led by Zuari Fertilisers has offered to buy shares of UB Group-promoted Mangalore Chemicals at Rs68.55, nearly 9 per cent higher than rival Deepak Fertilisers and Petrochemicals Corp Ltd's offer.

The open offer seeks to buy some 30.8 million shares at an expected cost of Rs211 crore, United Breweries (Holdings) said in a regulatory filing today.

On 2 May, Pune-based Deepak Fertilisers raised its price for a 26 per cent stake in Mangalore Chemicals to Rs.63 per share from Rs.61.75. It started a hostile takeover bid for the company, run by failed airline entrepreneur Vijay Mallya's UB Group with an open offer on 23 April.

Mallya, whose UB Group holds a 22 per cent stake in Mangalore Chemicals, could lose management control if Deepak Fertilisers's offer is fully subscribed to by minority shareholders. Half of the stake is mortgaged with lenders.

Poddar, whose Adventz Group produces farm inputs, owns 16.43 per cent in Mangalore Chemicals.

In an interview a year ago, Poddar had said he wanted to take over Mangalore Chemicals, but wouldn't launch a hostile bid to wrest control of the company from his friend Mallya. The UB Group chairman, too, had at that time, welcomed Poddar as an investor in Mangalore Chemicals, fuelling speculation that he had been brought in as a white knight to stave off potential takeover bids.

Since Deepak Fertilisers announced its unexpected and unsolicited bid, Poddar has been trying to strike a deal with Mallya for the 22% stake held by UB Group.

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