The race for the Vijay Mallya-controlled Mangalore Chemicals & Fertilizers Ltd (MCF) commenced a year ago.

It began when Saroj Poddar’s Zuari Fertilisers and Chemicals picked up nearly 10 per cent of the company at a low cost from the market.

Three months later, on July 3, the Sailesh Mehta-run Deepak Fertilisers and Petrochemicals threw its hat in the ring by acquiring a 24.46 per cent stake in MCF. Poddar responded by raising his holding to 16.43 per cent over the next two weeks.

But just when everyone was expecting the race to heat up, both sides paused. The standstill was broken on Wednesday with Deepak Fertilisers making the much awaited open offer.

What next? Theoretically, Deepak Fertilisers’ offer opens an array of opportunities, the most important of them being the possibility of a counter-offer from Poddar.

Business Line reported on March 12 that Zuari’s Poddar, who had earlier said he would sell his stake in the company, was back in the race for MCF. The change of heart was attributed to a reversal in Mallya’s stance.

The Mallya factor Though Mallya owns only 22 per cent of MCF, his participation is important as a peculiar clause in MCF’s articles of association allows UB to have three directors on the board with as little as a 15 per cent holding.

The UB group chairman initially put up a bold face to Poddar’s takeover initiatives.

“I intend to keep MCF within the UB Group fold,” Mallya told reporters on September 25 last year.

In response, Poddar issued a deadline for Mallya to sell his stake in MCF to the highest bidder.

But the situation underwent a dramatic change when lenders tightened the noose around UB, forcing Mallya to soften his stand on MCF. Poddar, who reportedly has a first-right-of-refusal treaty in place on Mallya’s shareholding in MCF, also kept relaxing the timeline.

Market sources felt he was waiting to stake a claim on MCF.

Approached for comments on Wednesday, the Poddar camp only said they were yet to take a call on the open offer by Deepak Fertilisers.

UB’s response The most crucial comment came from the Mallya camp; “We will study the open offer, review our options and respond accordingly,” said a UB spokesperson.

Market sources feel the response confirms that UB is now seriously considering an exit from the company.

If that is true, with Deepak Fertiliser’s open offer and Poddar’s supposed first right of refusal for UB’s stake, the battle for MCF is set to take an interesting turn.

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