Yesterday, the shareholders of the rail engineering firm approved a special resolution through postal ballots to issue 24.9 per cent fresh equity on a preferential basis to Poddar’s Texmaco, a leading rail wagon and coach manufacturer of India.
Kalindee has been the subject of an intense takeover battle between Calcutta-based Texmaco and Jaipur-based Jupiter Metal Private Ltd. Both the companies have been trying to woo the minority shareholders of Kalindee with competing open offers.
Poddar is also vying with Sailesh Mehta of Deepak Fertilisers for Vijay Mallya’s Mangalore Chemicals and Fertilizers Ltd (MCFL). Deepak Fertilisers holds 24.5 per cent in MCFL, while Poddar’s Zuari Agro has 16 per cent. All the three companies compete with each other in the fertiliser business, but the huge debt burden of the UB group has led to speculation about MCFL being an apparent takeover target for rivals Zuari and Deepak Fertilisers.
Poddar’s breakthrough came last month when he convinced the promoters of Kalindee to sell their stake to Texmaco, bagging 11.74 per cent in the firm.
“With over a 36 per cent stake, we now have a comfortable position in Kalindee. However, we can take charge of the management only after our open offer runs its course,” Poddar said on Saturday while disclosing the result of the postal ballot.
He said nearly 99 per cent of the shareholders approved the resolution on the preferential allotment.
The allotment is being done at Rs 65.13 per share, valuing the transaction at around Rs 27 crore.
Following a board resolution, Texmaco has proposed to buy a 30 per cent additional stake in Kalindee through an open offer at Rs 68 a share.
However, Jupiter Metal had made a counter offer seeking to acquire 30 per cent for Rs 70 apiece.
Texmaco’s offer will open on September 13 and close on September 26. Jupiter’s offer will remain open between September 3 and 17.
The board of Kalindee is slated to meet on Wednesday to form a committee of directors to examine the two offers.
On Friday, the shares of Kalindee closed at Rs 67.55 on the Bombay Stock Exchange, down 0.95 per cent, or Rs 0.65, even as the benchmark Sensex had its worst day in two years and fell 3.97 per cent.
All eyes will now be on the next move of Jupiter Metal, which has already hiked its open offer price once.
If the Texmaco acquisition goes through, it will herald further consolidation in the domestic rail sector. A few years back, Titagarh Wagon Ltd, another Calcutta-based firm, acquired majority control in Cimmco, which was previously owned by the Birla family.
Texmaco is the second largest player in wagon construction after Titagarh with both having a sizeable manufacturing presence in Bengal.
Poddar had said the acquisition of Kalindee would fit well with Texmaco’s strategy to offer complete solutions to its customers, especially Indian Railways, because Texmaco manufactures products, while Kalindee is into services.
Texmaco reported a total income of Rs 143.7 crore for the first quarter of 2013-14 against Rs 150 crore a year ago. Net profit fell to Rs 11.37 crore from Rs 21.22 crore a year ago.
The company said its results were affected by the delay in the release of annual wagon orders by the railways, which has also resulted in substantial under-utilisation of production capacity.