The battle for takeover of Mangalore Chemicals & Fertilizers Ltd (MCF) is set to intensify with Deepak Fertilisers likely to top the open offer made by Vijay Mallya and Saroj Poddar to MCF shareholders.
Mallya-Poddar duo, which have management control of MCF, had made an open offer on Tuesday at Rs. 68.55 per share to thwart a hostile takeover bid by Deepak Fertilisers.
However, with the MCF scrip comfortably perched above Rs 70, Deepak's fresh offer needs to be above that figure, and definitely above the offer made by Mallya and Poddar.
Now that the company has completed finalising its accounts, rivals' counter offer is being studied and an announcement is expected soon, Sailesh Mehta, chairman and managing director of Deepak Fertilisers, said on Thursday.
"It's not a simple decision of making an offer to a counter offer. We have to consider a variety of angles. What we plan to do is study the implications of counter offer in light of takeover code, and crystalise our strategy. We have to now sit with the merchant bankers, look at the various implications, and then take a firm call," Mehta told a TV channel.
The funding of a likely higher offer wouldn't pose any financial strain, as Deepak, which posted a stellar set of quarterly numbers on Thursday, has a strong balance-sheet and comfortable debt-equity ratio.
Mehta, who now owns a little above 25.31% in MCFL, however, is not ruling out any settlement with the Poddar-Mallya duo, as the combined entity holds about 39%.
"Have room for discussion with Saroj Poddar and Vijay Mallya. They are known friends and always room for discussion on how do we make sure that MCF unit and its growth is not compromised at any point of time."
Poddar's Zuari Agro Chemicals holds 16.43%, while Mallya, who is the promoter of MCF, has 22.91%.
After acquiring the stake, Mehta's SCM Soilfert and Deepak Fertilisers on April 23 jointly launched a hostile takeover bid of MCF announcing an open offer to buy another 26% for Rs 61.75 a share. The offer price was subsequently revised to Rs 63 on May 1, after which Poddar and Mallya along with a host of 'Persons Acting in Concerts', including BK Birla group holding company Pilani Investments, responded with the latest counter offer.
Frustrating the offers, the share price of MCF crossed Rs 70 on May 2, and has remained above that in most of the days since then, necessitating a revised offer now.