Rivals in July, friends in October. That seems the next twist in the race between the promoters of Deepak Fertilisers and Petrochemicals and Zuari Fertilisers & Chemicals, for controlling Vijay Mallya’s Mangalore Chemicals and Fertilizers (MCF).
Pune-based Deepak’s Sailesh Mehta might hold a meeting next week with Zuari’s Saroj Poddar to make an offer to buy out the latter’s stake in MCF. This would be the first time that the suitors would meet on a deal that could benefit both.
Poddar and Mehta were pitted against each other to acquire Mallya’s prized jewel. Deepak Fertilisers had surprised Poddar and Mallya by directly buying 24 per cent of MCF’s shares on the open market. But Mallya changed his mind over giving away control and made his intent public during MCF’s annual general meeting last week.
Subsequently, Poddar said he would sell his stake to the highest bidder, as he did not see any reason for staying invested in MCF without management control. Though Poddar is supposedly out of the race, he still matters to this takeover.
A senior official of Deepak Fertilisers said: “If Poddar is speaking his true mind, then paying a good price for his stake is the natural order. Mehta had a smile on his face reading recent reports on MCF takeover, as Poddar has announced his intent to exit. We are trying to work out a meeting with Poddar to offer him a good price.”
Poddar has confirmed to Business Standard he would not judge anyone beforehand and consider only the right price to decide who gets his stake.
Deepak Fertilisers had to pay a hefty Rs 180 crore for its stake in MCF it bought on July 3, while Poddar outsmarted the Pune suitor by buying Mallya’s pledged shares from a bank in April. Poddar’s total investment, including for the additional stake he bought on the open market after Deepak did in July, for his little over 16 per cent stake is less than Rs 90 crore.
“He (Poddar) got it quite cheap. Since we are just shy of 25 per cent, an interesting price can be offered that would benefit both the parties,” the official said. On Mallya’s claim that he could buy back both Deepak’s and Poddar’s stake in MCF, he said that was an old trick to increase the value of his stake. Mallya has about 20 per cent stake in MCF and remains adamant about not giving away control to any of its suitors, whom he likes to call his friends.
Mehta is keen on buying Poddar’s stake, because a stake over 25 per cent stake in MCF would trigger an open offer, according to market regulator Securities and Exchange Board of India’s regulation.