Poddar ups ante in war over MCF

Zuari buys 3.5% more stake; Mallya's holding drops 1% as lenders sell pledged shares

In a three-way battle being played out for Mangalore Chemicals & Fertilizer (MCF) — still precariously owned by UB Group Chairman Vijay Mallya — Zuari Chemicals Chairman Saroj Poddar on Wednesday bought an additional 3.5 per cent stake, taking his total to 13.5 per cent. The shares were bought for Rs 25 crore at Rs 61 apiece.

In the process, Poddar upped the ante against Deepak Fertilisers, which had recently picked 24.5 per cent stake in the company. “This is a step by Poddar to show Deepak Fertilisers’ Mehtas that he is serious in his bid to take over MCF. But as of now, it’s advantage Deepak,” a banker said.

Even as the two are jostling to take over the Rs  3,000-crore company, Mallya’s stake in MCF has dropped a little over one per cent to 20.99 per cent, with lenders continuing to sell shares pledged with them. Mallya had earlier pledged these shares to fund his now-grounded Kingfisher Airlines.

Senior UB Group officials say Mallya will remain in control of MCF till his holding in the company slips below 15 per cent. However, according to bankers, since more than half of his shares are pledged and lenders are selling these without a second thought, UB Group might not have an option but to sell out his stake.

According to an agreement between Mallya and Poddar, Zuari was to buy MCF in a friendly takeover. But Deepak Fertiliser jumped into the fray, buying 24.5 per cent stake in MCF and planning to launch an open offer. According to the Sebi takeover code, a shareholder has to make an open offer if his holding exceeds 25 per cent.

Mallya and Poddar are set to meet over MCF in the next few weeks and discuss Deepak’s “hostile” bid. When contacted, Poddar confirmed this, saying: “This (Zuari’s) is not a hostile bid. A meeting with Mallya is on the cards this month.”

Investors of MCF, meanwhile, are rejoicing. The company’s shares surged on BSE on Wednesday to close 10 per cent up at Rs 61.70.