Poddar to meet Mallya over MCF strategy

Bankers say stage set for a counteroffer from Zuari Agro Chemicals chief

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The race to gain control over Mangalore Chemicals and Fertilizers (MCF) is set to enter the next lap. Saroj Poddar, chairman of Zuari Agro Chemicals and a key contender for control of MCF, is set to meet liquor baron Vijay Mallya in the middle of this week to arrive at a joint strategy for MCF. Poddar, who owns 16.43 per cent stake in MCF, has confirmed the meeting, slated to be held in Bangalore this week.

MCF is considered to be one of the last jewels in Mallya’s crown; it is in the middle of a three-pronged fight for control of the company.

This isn’t the first time Mallya and Poddar will meet to discuss MCF’s fate. At an earlier meeting in London, Mallya walked away from the table without taking a call on joining hands with Poddar. That meeting followed Pune-based Deepak Fertilisers making a surprise entry into MCF by buying 24 per cent on July 3 last year. Deepak Fertilisers holds 25.31 per cent stake in MCF, and this has made it mandatory for the company to announce an open offer.

Bankers say the stage is set for a counteroffer from Poddar. “I will not be surprised if the entire fight over MCF gets over, with all the three main players (Mallya, Deepak Fertilisers Chairman Mehta and Poddar) arriving at a decision. Mallya is certain to get out but at a good price,” said a banker on condition of anonymity.

According to sources privy to the development, Poddar has already initiated a set of meetings with his financial advisors to help him come up with a strong pitch for Mallya.

Poddar’s meeting with Mallya is being perceived as a major turning point in the MCF issue, as Deepak Fertilisers has increased its open offer price from Rs 61.75 a share to Rs 63, to acquire additional 26 per cent stake in MCF. With Mehta making an open offer, it’s now up to Poddar to make his next move.

On Friday, when Deepak Fertilisers had revised its open offer price to Rs 63 a share, a company source had said much would depend on Poddar’s reaction, adding Deepak Fertilisers was keen to see how Poddar reacted to the current equation over MCF.

Earlier, Poddar had nearly lost hope of getting control of MCF. He had hinted he would sell his stake to the highest bidder. However, after the open offer, Poddar turned cautious and said he would take a decision after talking to Mallya, adding he wouldn’t go for a hostile takeover. Now, Deepak Fertilisers, too, is sending out a similar message; it is open to talks with both Mallya and Poddar.

With all eyes set on the meeting between “good friends” Mallya and Poddar, the fate of MCF hangs in the balance.