Mangalore Chem rallies 14% as Zuari makes new open offer

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Shares of Mangalore Chemicals and Fertilizers (MCFL) rallied over 14 percent intraday on Friday as the open offer bid intensifies again. The Kolkata-based industrialist Saroj Poddar-led Zuari group will spend upto Rs 282.19 crore to buy over three crore shares in UB Group firm through a fresh open offer.

The voluntary open offer for 3.07 crore MCFL shares constitutes 25.90 percent of the company's fully diluted voting equity share capital. The offer is not conditional upon any minimum level of acceptance. It 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.

"ICICI Securities Ltd, manager to the open offer, has submitted to BSE a copy of public announcement regarding voluntary open offer for acquisition of up to 3,07,00,000 fully paid-up equity shares of MCFL from the public shareholders by Zuari Fertilisers and Chemicals together with Zuari Agro Chemicals...", a BSE filing said.

The fertiliser company also announced appointment of Vijay Mallya's step-mother Ritu Mallya as a director of the firm with immediate effect. In a surprise move on December 1, liquor baron Mallya had resigned as MCFL director.

In the battle for control of MCFL, Mallya had sided with Zuari group and launched the counter an earlier open offer to ward off the takeover bid of Deepak Fertilizers.

After those open offers of both Deepak and rival Zuari-UB group closed on October 20, Deepak Fertilisers' stake in MCFL increased by about 6 percent through an open offer to about 32 per cent and inched closer towards the rival Zuari-UB group's combined stake of 38.4 per cent.

The battle for MCFL between Deepak Fertilisers and Zuari Group was triggered in April 2013 when the latter bought about 10 per cent stake in MCFL through open market.

Later, Deepak Fertilisers acquired 24.46 per cent stake in MCFL in one-go in July 2013. After this, Zuari group had increased its stake to 16.43 per cent in the same month.

The board of MCFL is being restructured to include two representatives of Poddar's Adventz Group.

At 09:51 hrs Mangalore Chemicals and Fertilisers was quoting at Rs 93.95, up Rs 7.80, or 9.05 percent while Deepak Fertilizers and Petrochemicals Coprn was quoting at Rs 137.05, up Rs 5.30, or 4.02 percent on the BSE.