Market regulator Sebi has sought clarifications from two rival bidders who have made offers for acquisition of additional stakes in Vijay Mallya-led UB Group’s Mangalore Chemicals and Fertilisers Ltd (MCFL).
The clarifications have been sought through merchant bankers of the two rival bidders — Deepak Fertilisers and Zuari Fertilisers, among which the latter has been joined by the existing promoters of MCFL as ‘persons acting in concert’.
According to latest data made public by Sebi, the clarifications were sought from JM Financial (merchant banker for Deepak Fertiliser group) on June 20. Prior to that, Sebi sought additional details on June 17 from ICICI Securities and Ambit Corporate Finance, who are acting as merchant bankers for Zuari in their proposed open offer for MCFL.
The reply was awaited from the merchant bankers for both the open offers, says the latest update on ‘processing status of draft offer documents’ filed with the capital markets regulator as on June 20.
It could not be ascertained whether there has been any developments since then and the next update would be provided by Sebi next week.
An open offer for acquisition of additional stake in a listed company can move forward only after issuance of ‘observations’ by Sebi.
The battle for MCFL started in April last year when Zuari Fertilisers bought about 10 per cent in the company from SBI group entities in the open market.
Deepak Fertilisers followed with acquisition of a 24.46 per cent stake in MCFL in July 2013. Zuari group then increased its stake to 16.43 per cent in the same month.
Zuari, Deepak Fertiliser and MCFL compete with each other in the fertiliser business, but a huge debt burden of the Mallya-led group had triggered a takeover battle for MCFL.
Earlier in May this year, UB Group joined hands with the Zuari group to ward off a hostile takeover bid by Deepak Fertilisers for MCFL and offered to buy more shares in the firm at a 9 per cent higher rate than their rival.
