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Boby Kurian

Bangalore , Sept. 9

THE UB group today confirmed plans to make an offer for 46 per cent shares of Herbertsons Ltd, the country's third largest spirits company at the centre of an ownership dispute between Mr Vijay Mallya and Mr Kishore Chhabria.

"We are making an offer to buy 46 per cent shares of the company in accordance with SEBI guidelines from anyone willing to sell," a top UB group official said. This is the UB group Chairman, Mr Mallya's counter bid to Mr Kishore Chhabria's open offer for 20 per cent shares as directed by the Securities Appellate Tribunal (SAT) last month.

UB has roped in Kotak Mahindra Caps as the manager for the proposed issue. It is reliably learnt that UB may have to show up with roughly Rs 100 crore in this competitive bidding even though the exact pricing of the counter offer will be known when an official announcement is made on Wednesday.

This development follows the SAT order, which regularised Mr Chhabria's 49 per cent stake in the company and directed him to make an open offer for further 20 per cent.

The holding of UB group through United Breweries Holding Ltd is pegged at 24 per cent.

Subsequently, the Chhabria camp made an open offer priced at Rs 90.05 per share (It will translate to Rs 210 per share for those holding shares from 1995 as Mr Chhabria was also asked to cough up interest calculated at 15 per cent).

The offer opens on October 3. Mr Mallya and UB have challenged the SAT order in the Supreme Court and the next date of hearing is posted to September 15.

The UB officials confirmed yesterday's report in this newspaper that Mr Mallya might offer to buy 19 per cent shares of Herbertsons purchased by Mr Kishore Chhabria from the open market.

"We believe that these shares were illegally bought, and in tune with earlier High Court ruling, these disputed shares should be brought into the ex-post-facto offer which is now competitive," the UB official said.

Informed sources said Mr Mallya's counter bid for 46 per cent shares satisfied SEBI regulations on takeover through competitive bidding and more importantly showed the strategic intent to buy the disputed 19 per cent shares which Mr Chhabria mopped up from the open market.

The quantum of floating shares of Herbertsons is estimated at 18 per cent and the proposal to buy 46 per cent shares would remain as an intent unless the apex court directs Mr Chhabria to throw the shares bought from the open market into the offer.

Meanwhile, talks for an amicable settlement between the two warring liquor barons has been derailed and any effort to resume the same would depend on the SC hearing on September 15 when the court will scrutinise the maintainability of UB's appeal against SAT order.

It must be mentioned that the apex court on Monday issued notice to the SEBI and asked the regulator to clarify before the next hearing on what would happen if it was found that the acquisition of 19 per cent of shares in Herbertsons by the Chhabrias was void and whether there could be ex-post facto offers.

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