Deepak Fertilisers sells 2% stake in MCF

With this, Deepak Fertilisers' stake in MCF has declined to 29.05% from 31.25% at the end of the last quarter

Deepak Fertilisers, which is in the middle of a year-long battle to acquire Mangalore Chemicals and Fertilizers, has sold over two per cent stake in the takeover target in nine tranches during the past month.

With this, Deepak Fertilisers' stake in Mangalore Chemicals has declined to 29.05 per cent from 31.25 per cent at the end of the last quarter.

Reacting to the development, Zuari chief Saroj Poddar, who has joined hands with UB Group boss Vijay Mallya to ward off Deepak Fertilisers' move, said, "Now that Deepak Fertilisers has decided to pare its stake, it is an indication they want to cash out. We want to increase our stake to 75 per cent along with the UB Group."

Poddar along with the UB Group holds about 38 per cent stake in Mangalore Chemicals.

Poddar pointed out that his agreement with Mallya was on and he was allowed to appoint three directors on the Mangalore Chemicals board.

Mangalore Chemicals shares closed marginally down at Rs 89.70 on the BSE on Monday while shares of Deepak Fertilisers rose over two per cent to Rs 146.50.

Responding to claims that Deepak Fertilisers had thrown in the towel, its chief financial officer and president, Somnath Patil, said, "We are still the majority stakeholder with 28 per cent. How does 2.2 per cent even matter? We will shortly come out with a decision. It will be premature to say that we have lost interest in Mangalore Chemicals."

Sources close to the development said the Pune-based company was in wait and watch mode and the sale of over 2 per cent stake in Mangalore Chemicals may not be a signal that Sailesh Mehta, promoter of Deepak Fertilisers, was giving up his acquisition plan. However, analysts tracking the takeover story said this well might be the first sign of Mehta losing interest.

Last week, Poddar had raised the size of his open offer for Mangalore Chemicals stock from 25.9 per cent to 36.56 per cent to allow Deepak Fertilisers to cash out. The new offer, priced at Rs 91.92 a share, is close to Rs 400 crore.

Mallya resigned from the Mangalore Chemicals board in December. Mangalore Chemicals has been in the midst of a takeover battle for over a year now.

STORY SO FAR

APRIL 2013

• Zuari chief Saroj Poddar buys 10% stake in MCF
• Says he is in talks to jointly run the company with MCF chairman Vijay Mallya

JULY 2013

• Sailesh Mehta-led Deepak Fertilisers buys 24% stake in MCF
• Poddar increases his stake to 16.4% through open-market purchase of shares

APRIL 2014

• Deepak further increases its stake to 25.3 %, triggering an open offer

MAY 2014

• Poddar and Mallya launch a counter offer
• The Poddar-Mallya open offer is made at Rs 68.55 a share, compared with Deepak’s Rs 63 a share

JULY 2014

• Sebi clears open offer proposals of Mallya- Poddar duo and Deepak Fertilisers

AUGUST 2014  

• CCI nod to Deepak Fertilisers to launch open offer

SEPTEMBER 2014

• CCI clears Zuari-UB group’s proposal to launch open offer for additional stake in MCF

SEPTEMBER 26, 2014

• Depeak Fertilisers revises open offer at Rs 93.60 per share against Mallya -Poddar’s joint offer revised at price of Rs 81.60 a share  

DECEMBER 5, 2014

• Zuari’s Poddar comes up with new open offer priced at Rs 91.92 a share

JANUARY 5, 2015

• Deepak Fertilisers sells 2.2% stake in MCF fueling speculations of an exit from firm

It started with Poddar acquiring about 10 per cent stake in Mangalore Chemicals during April 2013 but then Deepak Fertilisers in July 2013 bought about 24 per cent of the stock from the market. Poddar, too, bought more shares in two tranches to increase his stake to 16.43 per cent.

Deepak Fertilisers increased its stake to over 25 per cent in April 2014, triggering a mandatory open offer.

After receiving regulatory clearances, both sides revised their open offers through which Deepak Fertilisers cornered another six per cent stake, taking its holdings in Mangalore Chemicals to over 31 per cent. Deepak Fertilisers' offer was higher at Rs 93.6 a share against the Poddar-Mallya combine's Rs 81.60.