Deepak springs surprise, offloads 2.2% stake in Mangalore Chem

In an unexpected move, Deepak Fertilizers, which has been fighting to gain control of Mangalore Chemicals & Fertilizers Ltd (MCFL), has sold a 2.2 per cent stake in the Vijay Mallya-led fertiliser firm.

In a filing with the Bombay Stock Exchange (BSE), Deepak Fertilizers said it has sold over 26 lakh shares, representing a 2.2 per cent stake, in MCFL during December 2014 through nine different open market transactions.

Pune-based Deepak Fertilizers has been competing with the Kolkata-based Zuari Group led by Saroj Poddar-led for taking control of MCFL since July 2013.

After the sale of 26 lakh shares, Deepak Fertilizers' stake in MCFL has come down to 29.05 per cent from 31.25 per cent. The Pune-based company held these shares through its subsidiary SCM Soilfert.

When contacted by PTI, the company's spokesperson declined to comment on the reason behind offloading the 26 lakh shares in MCFL.

However, sources said Deepak is still in the race and all options are open. They also added that Deepak continues to remain the largest shareholder in MCFL after Mallya's UB Group.

At present, UB holds a 21.97 per cent stake and Zuari group has a 16.47 per cent stake in MCFL.

The announcement by Deepak Fertilisers comes a week after Zuari group revised its open offer size to 4,33,29,000 equity shares representing 36.56 per cent of the total share capital of MCFL.

Zuari had retained the price of open offer at Rs 91.92 per share.

With an increase in the offer size, Zuari Group would now have to spend Rs 398.2 crore from the earlier figure of Rs282.19 crore.

The battle for takeover of MCFL was triggered in April 2013 when Zuari bought about 10 per cent stake in MCFL through open market operation.

Later, Deepak Fertilizers acquired 24.46-per cent stake in MCFL in July 2013. After that, Zuari group had increased its stake to 16.43 per cent in the same month.

Deepak Fertilizers further raised its 25.31 per cent stake in MCFL in April 2014, triggering the need for launch of mandatory open offer.

The UB group had sided with Zuari group to launch the counter open offer, which opened on October 1 and closed on October 20, to ward off the takeover bid of Deepak Fertilizers.

In that open offer, Zuari group was able to buy only 42,424 shares as its offer price was lower than Deepak's offer price of Rs93.60 per share.

However, Deepak Fertilizers was able to raise its stake in MCFL by about 6 per cent to 31.25 per cent.