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Boby Kurian

Bangalore , Sept. 8

THE UB Group Chairman, Mr Vijay Mallya, is expected to make an offer for 19 per cent shares of Herbertsons purchased by Mr Kishore Chhabria from the open market, along with a bid to buy out additional 20 per cent stake in Herbertsons Ltd, the country's third largest liquor company.

Mr Mallya's offer would be a counter to Mr Chhabria's open offer to buy back 20 per cent from the open market as directed by the Securities Appellate Tribunal (SAT). While Mr Chhabria's offer is scheduled to open on October 3, Mr Mallya has to indicate his counter bid intention by September 11, sources said.

The development follows last month's SAT order regularising Mr Chhabria's 49 per cent stake and directing him to make an open offer for further 20 per cent. Subsequently, Mr Chhabria made an open offer priced at Rs 210 per share.

It is learnt that Mr Mallya's manager for the proposed issue could be either Ambit Corporate Finance or Kotak Mahindra Caps. However, the UB group officially maintained that a final decision regarding the counter offer "is still pending after being referred for legal opinion".

Sources said Mr Mallya's counter offer made sense only if it targeted the open market shares held by Mr Chhabria. "There is no point otherwise as we believe he (Mr Chhabria) holds over 50 per cent shares in the company. Who will then subscribe to our counter offer?" UB sources said. However, the industry observers tracking the development said the offer for the shares purchased by Mr Chhabria from the open market will succeed only in the wake of an out-of-court settlement between the two warring liquor barons.

Incidentally, observers are still betting on an out-of-court settlement as the most likely outcome of this decade-long battle for control over Herberstons. In the wake of the SAT order, Mr Mallya had told the media that he would settle the dispute within two to three weeks time by buying out Mr Chhabria's entire stake. Mr Chhabria has also maintained that he was in favour of an amicable settlement even though he has not explicitly talked about walking out of the company.

Mr Mallya's counter offer looked inevitable after the Supreme Court on Monday did not stay the open offer proceedings set in motion by the Chhabria camp.

The apex court while admitting Mr Mallya's Special Leave Petition posted the next hearing for September 15. Earlier, SAT had also turned down Mr Mallya's appeal against the open offer directive.

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