Deepak Fertilisers to make open offer for 26% stake of Mangalore Chemicals

Deepak Fertilisers and Petrochemicals (DFP) today announced an open offer to acquire up to 2 million fully paid-up equity shares of Mangalore Chemicals and Fertilisers (MCF), representing up to 1.7 per cent stake, to take its stake in the UG Group company to 26 per cent.

Assuming purchase of the entire quantity of shares as indicated, Deepak Fertilisers' stake in MCF will rise to 26.1 per cent, triggering an open offer for further purchase of equity shares.

The company said it had placed an order with JM Financial Services Ltd to purchase up to two million shares at a price not exceeding Rs63 each.

The acquisition will raise Deepak Fertilisers stake in Mangalore Chemicals to 26.1 per cent, the Pune-based company said in open offer made during trading hours today.

Deepak Fertilisers had, in July, bought 24.46-per cent stake in Mangalore Chemicals, a company controlled by liquor tycoon Vijay Mallya's UB Group, for Rs180 crore. The open market purchase was made through its subsidiary SCM Soilfert Ltd.

Deepak Fertilisers and Petrochemicals Corp Ltd and its subsidiary SCM Soilfert Ltd will launch an open offer to buy an additional 26 per cent stake in Mangalore Chemicals and Fertilizers Ltd, the company said in a filing with the Bombay Stock Exchange (BSE).

Deepak Fertilisers said it planned to acquire up to 30.8 million equity shares of Mangalore Chemicals from public shareholders at an offer price of Rs61.75 a share, for a total consideration of up to Rs190.27 crore.

The announcement sent the MCF scrip soaring 11.70 per cent to Rs69.20 during morning trade on the BSE.

Under the SEBI takeover rules, a company acquiring 25-per cent stake in a listed company must launch an open offer for buying at least 26 per cent more stake from the company's public stakeholders.

''We will study the offer, review our options and respond accordingly,'' a UB Group spokesperson said.

Deepak Fertilisers acquired the stake against the wishes of the Vijay Mallya who controlled Mangalore Chemicals.