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Mallya genie out after 20 years

Mumbai, Feb. 22: Swashbuckling liquor baron Vijay Mallya today struck to reclaim Shaw Wallace & Co, some 20 years after he had mounted a successful takeover raid with friend-turned-foe Manu Chhabria.

Mallya uncorked an open offer for 25 per cent of the stake in Calcutta-based Shaw Wallace valued at Rs 300 crore.

The sudden announcement seemed designed to exert pressure on the family of the late Manu Chhabria to sell the liquor company to him.

Late last year, Mallya had stumped up a Rs 1,251-crore bid in response to the Chhabria family's tender for Shaw Wallace's distillery division. The bid has since been mired in technicalities.

Mallya and Chhabria had been comrades in arms back in the early 1980s when they bid for the professionally-managed Shaw Wallace in one of India's most celebrated corporate battles.

Mallya had been forced to stay in the shadows because of the tight currency regulations back then, dealing his hand instead through Chhabria, a non-resident Indian.

Chhabria took over Shaw Wallace, shrugged off Mallya's claim and triggered one of the most enduring corporate rivalries India has seen.

If Mallya can persuade Chhabria's widow, Vidya, to hand over Shaw Wallace to him, he will be able to vault his UB group into second place behind Diageo, the world's largest liquor and spirits company with an annual turnover of '9 billion.

He has said he will talk only to Vidya and not the three daughters.

Addressing a tele-conference from New York, Mallya took pains to explain that his latest move should not be construed as a hostile bid. 'It is not intended to be a hostile takeover. Our decision to bid for 25 per cent of the public shareholding is one step closer to the larger picture of acquiring the Chhabria family's stake of 55 per cent,' he said.

The Chhabrias are not buying the Mallya argument. 'According to our understanding, any bid that does not come with the consent of the promoters or of the incumbent management is a hostile bid. In this case, both these provisos have been met and we, therefore, deem it as a hostile bid,' a Shaw Wallace official said.

The Shaw Wallace share settled at Rs 231.05 after hitting the day's high of Rs 242.

The latest twist in the long-running Mallya-Chhabria saga began when McKinsey, the consultancy firm which is helping the Chhabrias unlock their wealth in Shaw Wallace, called for bids for sale of the distillery business.

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