Zuari Agro Chemicals and Deepak Fertilisers, both of which are making competing bids for acquiring Mangalore Chemicals & Fertilizers, have got the Securities and Exchange Board of India’s approval to go ahead with their open offers.
However, they cannot float the open offers until they get concurrent regulatory approval from the Competition Commission of India (CCI).
Both companies in the past had submitted offers expressing “intent” to acquire MCF shares. Once the move is cleared by SEBI and CCI, Zuari and Deepak will get 12 days to complete the deal.
This includes a nine-day period during which offers can be revised.
The final offer (by either party) has to come three days prior to closure of the tendering process.
Merchant bankersIn the case of Zuari, its promoters are acting in concert with the existing promoters of MCF, and had filed draft offer documents in May.
Before passing the order, SEBI had sought clarifications from merchant bankers to Deepak Fertilisers and had also sought more details from ICICI Securities and Ambit Corporate Finance, the merchant bankers for Zuari.
Deepak Fertilisers holds a little over 25 per cent stake in MCF, while Zuari has a 16.43 per cent stake.
The UB Group has 22.91 per cent stake in MCF but half of it is pledged with the lenders who had funded promoter Vijay Mallya’s Kingfisher Airlines.
Takeover battleDeepak and Zuari have been increasing their stake by buying shares in the open market in an attempt to take over MCF.
Mallya in a desperate bid to keep the company under his fold had joined hands with Zuari to thwart Deepak Fertilisers’ takeover attempt. In April, Deepak made an open offer to acquire an additional 26 per cent in MCF at ₹63 per share with the total outgo being ₹190.28 crore.
The Zuari-Mallya combine countered it with a higher offer of ₹68.55 per share with the total outgo being ₹211.23 crore.
MCF’s shares were up a little over one per cent to close at ₹71.35 on the BSE on Monday.
SEBI has now agreed to both the offers as Zuari and Mallya have been considered “persons acting in concert”.
While Deepak’s shares closed 1.8 per cent down at ₹179.65 on Monday, the Zuari stock closed flat at ₹183.35 on the BSE.
The benchmark Sensex rose 0.29 per cent to 25,715.17.