The Telegraph
Since 1st March, 1999
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Mallya betters Chhabria offer

Mumbai, Sept. 10: Vijay Mallya has upped the ante in the battle for control of Herbertsons. His two group companies, McDowell & Company and Phipson Distillery, have made a counter-offer to pick up an additional 45.2 per cent in the company at Rs 200 per share. The offer is Rs 109.50 more than that made by his friend-turned-foe Kishore Chhabria for an extra 20 per cent stake.

The offer by the UB group for 43,00,000 shares of Herbertsons, payable in cash, would open on November 3, Kotak Mahindra Capital Company (KMCC), manager to the offer, said in a statement here today.

The total outgo for the counter offer is pegged at Rs 86 crore.

Vijay Mallya’s group companies stepped in on the last day to make a counter offer, after the Kishore Chhabria group, elated by the Securities Appellate tribunal’s (SAT) order, priced its offer at Rs 90.50 per share.

The SAT order had legitimised the holding of the Chhabria group in Herbertsons and had asked the Chhabrias to make an open offer for 20 per cent of the Herbertsons shares.

The bid compares well with the Chhabria offer as the UB group has not only raised the offer price to Rs 200 but has also offered to buy 45.2 per cent as against 20 per cent offered by the Chhabria faction.

“It must be noted that as this counter offer is for a larger number of shares than that contemplated by the original bid, a larger number of the shares tendered by a shareholder will be accepted by this counter offer as opposed to the original bid,” the offer announcement said.

“They have made the offer today. We are still studying the offer,” was the guarded response from sources close to the Kishore Chhabria camp.

However, they argue that Chhabria’s offer is better as the Rs 90.50 does not include the interest of 15 per cent. Once that is included, the offer could easily scale over Mallya’s. Most of the shareholders have the shares since 1994, which reflects the low liquidity in the Herbertsons counter on the BSE, they said.

The latest round in the decade-old strife between the two partners could be the beginning of the end, observers say. The base price has been arrived at. Now the counter bid will lead to negotiations between the two.

While the Mallya camp has said that the two factions have been negotiating for a while, the Chhabrias have sent out conflicting signals. It is a rare opportunity to become a sizeable player in the liquor industry, and the younger brother of the late Manu Chhabria won't look a gift horse on its mouth, experts feel.

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