The race for acquisition of Vijay Mallya’s UB group-controlled Mangalore Chemicals and Fertilisers (MCF) is entering the most interesting phase. On October 16, the Karnataka State Co-operative Marketing Federation will take a call on selling its 2.28 per cent stake in the fertiliser maker, according to a cooperative official.

Choices

Theoretically, it may either participate in the open offer from Deepak Fertilisers and Petrochemicals at ₹93.60 a share or sell the shares in the open market. The MCF shares closed at ₹95 on Monday.

The market price is a tad lower than the final payout of Deepak — including 10 per cent interest from September 3 to the final settlement date of November 5 — at ₹95.16 a share.

Meanwhile, the open offer that was scheduled to close on October 17 has been extended by a day by SEBI to October 20, as markets are closed on October 15 on account of assembly elections in Maharashtra.

The co-operative is the only public shareholder — other than the rivals Zuari and Deepak — having more than 1 per cent shareholding in the company.

Battle for control

The battle for MCF between Deepak Fertilisers and Zuari Group was triggered in April 2013 when the latter bought about 10 per cent stake in MCF through open market. Later, Deepak Fertilisers acquired 24.46 per cent stake in MCF in July 2013. After this, Zuari group increased its stake to 16.43 per cent in the same month.

Then both the companies launched open offers to acquire an additional 26 per cent stake in the company.

While Deepak increased its open offer price to ₹93.60 from its earlier offer of ₹63 a share, Zuari Fertilisers and Chemicals offered ₹81.60 a share, hiked from their earlier proposal of ₹68.55 a share.

Hectic market buying

Meanwhile, there has been hectic open market buying of MCF shares on Monday.

After a momentary lull on Friday, when merely 2.47 lakh shares were traded on both the exchanges, Monday saw nearly 16.4 lakh shares changing hands.

Almost 90 per cent (14.74 lakh shares) of shares were up for delivery. The trend is different from that in the early days of the offer, when the activity was primarily generated out of day trading.

Riding on buying support, the share closed 45 paise (0.48 per cent) higher on Monday at ₹95.

According to stock advisory firms Ventura Securities and Emkay Global Financial Services, the stock is commanding a much higher PE multiple than its peers.

Both have advised shareholders to exit from the stock.

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