After Karnataka State Co-operative Marketing Federation Ltd, Morgan Stanley today subscribed to Deepak Fertilisers' open offer for Vijay Mallya’s UB group-controlled Mangalore Chemicals Ltd (MCF), at Rs 93.60 a share.

Last week, the Karnataka cooperative tendered its 27 lakh shares, amounting to 2.28 per cent of the total share capital of the company, to Deepak Fertilisers.

The co-operative was the only public shareholder - other than the rivals Zuari and Deepak - having more than one per cent shareholding in MCF.

On Monday, Morgan Stanley, the only foreign institutional investor in MCF, tendered 450,000 shares (0.38 per cent). With this, the success of open offer is now largely dependent on the participation of the retail shareholders.

Market price still high

However, considering that the market price of MCF is still ruling well above the open offer price, it is questionable if Deepak will be successful in increasing its stake from 25 per cent to 51 per cent.

It may be mentioned that Deepak came out with an offer that was almost Rs 20 a share higher than the prevailing market price of MCF. Also, Deepak’s offer was Rs 12 a share higher than the best price offered by the UB-Zuari combine.

However, huge buying support in the following days kept MCF share price much above the open offer price. The shares reached up to Rs 104.65 and then cooled to Rs 95 level last week.

Even on Monday – the last day to tender the shares – MCF counter opened at Rs 94.55, went up to Rs 94.95 and is now hovering around Rs 94.10.