Zuari, Deepak Open Offers 'Fair and Reasonable': MCFL Panel

New Delhi: Mangalore Chemicals and Fertilizers Ltd's Independent Directors Committee has said that open offers by Deepak Fertilisers and the Zuari group for acquisition of a 26 per cent stake in the company are "fair and reasonable" as per regulations.

Intensifying the battle for acquisition of Vijay Mallya's fertiliser firm, Deepak Fertilisers on September 26 had raised its open offer price to Rs 93.60 per share, after which rival Zuari group in association with MCFL'S original promoters UB group also raised their offer price to Rs 81.60 per share.

As per the guidelines, MCFL announced formation of a single member IDC under the chairmanship of Pratap Narayan to give its recommendations on both open offers.

MCFL said in a BSE filing on Tuesday that both open offers are in line with the Substantial Acquisition of Shares and Takeover Regulations by capital market regulator Securities and Exchange Board of India (Sebi), and to that extent, "fair and reasonable".

According to the filing, the committee had given its recommendations on September 29 and said, "Today (September 29) the scrip has closed at upper circuit of Rs 88.10 on BSE and Rs 87.70 on NSE. Accordingly, shareholders should immediately evaluate the open offer and competing offer, as revised, and take an informed decision in the matter."

Meanwhile, Deepak Fertilisers has also written to MCFL's independent directors on its open offer claiming that rival bidder Zuari's win will help Mr Mallya to continue heading the firm.

The two-way battle for control of Mangalore Chemicals heated up again after the Competition Commission of India (CCI) cleared an open offer launched by Zuari Group firms on September 4.

Fair trade watchdog CCI had cleared the open offer of Deepak Fertilisers on August 19.

After this, both parties have announced that the open offer will start on October 1 and close on October 17. The last date for upward revision of the offer size or price was September 25.

Deepak Fertilisers had launched open offer to buy an additional 26 per cent stake in MCFL in April this year at Rs 63 per share following which Zuari and UB group joined hands in May and launched open offer for same number of shares at Rs 68.55 per scrip.

At present, Deepak Fertiliser holds a 25.31 per cent stake in MCFL whereas the consortium of Zuari group companies has 16.43 per cent and Vijay Mallaya's UB group holds 21.97 per cent.

The battle for MCFL between Deepak Fertilisers and Zuari Group was triggered in April 2013 when the latter bought an about 10 per cent stake in MCFL through open market.

Later, Deepak Fertilisers acquired a 24.46 per cent stake in MCFL in one go in July 2013. After this, Zuari group had increased its stake to 16.43 per cent in the same month.

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