Intensifying its fight to wrest control of Vijay Mallya's Mangalore Chemicals & Fertilizer Ltd (MCFL), Zuari group is likely to offer a higher price to the firm's shareholders in a bid to defeat a rival offer by Deepak Fertilisers.
In a hostile takeover bid, Deepak Fertilisers on April 23 raised its stake in the MCFL to 25.31 per cent and announced an open offer to buy another 26 per cent. Zuari Fertiliser holds 16.43 per cent stake in MCFL, while promoter UB group has 22.91 per cent.
"Zuari group is working towards counter open offer, and meetings are going on with the merchant bankers. Hopefully the offer will be a joint offer with the UB group," a source close to the development told PTI.
Deepak Fertilisers has fixed the open offer price at Rs 63 per share, which is lower than current share price of MCFL that closed at Rs 69.35 on the BSE.
When asked whether the group could sell its stake in the MCFL to Deepak Fertilisers, the source said: "Currently, the group is not considering to sell its stake to Deepak Fertilisers."
After Deepak Fertilisers open offer, Zuari Fertilisers Chairman Saroj Kumar Poddar had said: "We are evaluating and examining the development. All options are open."
A UB spokesperson had said: "We will study the offer, review our options and respond accordingly."
The battle for the takeover of MCFL has been going on for one year.
In April last year, Zuari Fertilisers had bought about 10 per cent stake in the MCFL from SBI group entities and open market, followed by Deepak Fertilisers acquisition of 24.46 per cent stake in the UB group company in July.
Later, Zuari group increased its stake in MCFL to 16.43 per cent during July 2013, in two-three rounds. Zuari, Deepak and MCFL compete in the fertiliser business, but the huge debt burden of the Mallya-led group has led to speculation about MCFL being an apparent takeover target.
