Mangalore Chemicals spurts after open offer from Zuari group

Mangalore Chemicals & Fertilisers jumped 8.76% to Rs 93.70 at 10:38 IST on BSE after Saroj Poddar-led Zuari group announced a voluntary open offer to acquire upto 3.07 crore shares constituting 25.9% stake in MCFL at Rs 91.92 per share.

The announcement was made after market hours yesterday, 4 December 2014.

Meanwhile, the S&P BSE Sensex was up 45.98 points or 0.16% at 28,608.80.

On BSE, so far 5.76 lakh shares were traded in the counter as against average daily volume of 1.87 lakh shares in the past one quarter.

The stock hit a high of Rs 98.35 and a low of Rs 92.30 so far during the day. The stock had hit a record high of Rs 104.65 on 8 October 2014. The stock had hit a 52-week low of Rs 52.30 on 16 December 2013.

The stock had underperformed the market over the past one month till 4 December 2014, advancing 0.23% compared with Sensex's 2.52% rise. The scrip had, however, outperformed the market in past one quarter, surging 24.22% as against Sensex's 5.45% rise.

The small-cap company has equity capital of Rs 118.52 crore. Face value per share is Rs 10.

Saroj Poddar-led Zuari group (Zuari Fertilizer and Chemicals, Zuari Agro Chemicals) announced an open offer to acquire upto 3.07 crore shares constituting 25.9% of the fully diluted voting equity share capital of Mangalore Chemicals & Fertilisers (MCFL) at Rs 91.92 per share aggregating to Rs 282.19 crore. The open offer price was at a premium of 6.69% over MCFL's closing price of Rs 86.15 yesterday, 4 December 2014.

The latest open offer sets the stage for another bidding war for control of MCFL, which is target of an intense takeover battle between Zuari group and Pune-based Deepak Fertilisers & Petrochemicals Corporation (Deepak Fertilisers). The battle for MCFL between Deepak Fertilisers and Zuari Group was triggered in April 2013 when the latter bought about 10% stake in MCFL through open market. Later, Deepak Fertilisers acquired 24.46% stake in MCFL in one go in July 2013. After this, Zuari group had increased its stake to 16.43% in the same month.

After open offers of both Deepak Fertilisers and rival Zuari-UB Group closed on 20 October 2014, Deepak Fertilisers' stake in MCFL increased by about 6% to about 32% and inched closer towards the rival Zuari-UB group's combined stake of 38.4%.

Meanwhile, MCFL at the fag end of trading hours yesterday, 4 December 2014, announced appointment of Vijay Mallya's step-mother Ritu Mallya as a director of the firm with immediate effect. On 1 December 2014, Vijay Mallya had resigned as MCFL director.

MCFL's net profit spurted 351.4% to Rs 42.57 crore on 2% decline in net sales to Rs 1196.73 crore in Q2 September 2014 over Q2 September 2013.

Mangalore Chemicals and Fertilizers is a fertilizers manufacturing company situated in the state of Karnataka, India. The company with its wide range of products, that include urea, di-ammonium phosphate, muriate of potash, granulated fertilizers, micronutrients, soil conditioners and specialty fertilizers, touches and enriches the lives of farmers across southern india.

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