The Hindu Business Line : Mallya raises stake in Herbertsons to 36%

WHETHER it can be called a victory for liquor baron Mr Vijay Mallya in his quest for control of Herbertsons Ltd, the country's third-largest spirits company, is debatable. Mr Mallya has, however, managed to raise his equity stake in Herbertsons to about 36 per cent as against the 49 per cent held by rival Mr Kishore Chhabria.

McDowell and Company Ltd, which had made an open offer to acquire 43 lakh shares constituting 45 per cent of Herbertsons equity capital from its shareholders at Rs 215 per share has managed to garner a little over 7 per cent stock of the company.

Phipson Distillers and United Breweries (Holdings) acting in concert with McDowell spent Rs 14.65 crore mopping up about 6.76 lakh shares tendered in the offer, according to a SEBI filing.

Post-acquisition, Mr Mallya's stake in the company, which owns the bestselling Bagpiper brand whisky and Romanov vodka, has risen to 35.66 per cent from the previous 28.55 per cent.

Meanwhile, an out-of-court settlement being pursued by Mr Mallya and Mr Kishore Chhabria of the Shaw Wallace group does not appear to have made any headway.

The UB group had, in an interim application filed in the Supreme Court in January, suggested a way out to insulate the small shareholders from the ongoing legal battle. UB, through the affidavit, had sought appointment of joint custodians for an escrow account that would hold the shares tendered by the small shareholders in the wake of the public offers made by both Mr Mallya and Mr Chhabria.

On November 3, the two rivals, in a joint plea, sought advancing of the open offer dates to enable them resolve the dispute amicably. The court subsequently extended the last date for closing both the offer and the counter offer to January 30. The last date for revision of the offer and the counter was pushed to January 15 and the last date for withdrawal of offer to January 27. Mr Chhabria, who holds 49 per cent stake in the company, has made an offer for further 20 per cent shares at Rs 211 per share, while Mr Mallya had countered with a Rs 215-per-share offer.

In August last year, the Securities Appellate Tribunal had regularised Mr Chhabria's stake in Herbertsons and directed him to make an open offer, a ruling that would have seen the management of Herbertsons passing from the UB group to Mr Chhabria. UB challenged the SAT order in Supreme Court and sought a stay on the public offer made by Mr Chhabria. UB came up with a counter as the court refused to stay the open offer that once again raised the heat in this decade-long dispute for control over Herbertsons, the third largest domestic spirits company.

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