The move is part of a complex corporate strategy aimed at floating Cementone on the stock market with an expected value of about pounds 40m.
John East, the corporate finance boutique and broker to Multitrust, is understood to have played a key behind-the-scenes role in putting the deal together over the past three months.
Multitrust, which is controlled by Andrew Perloff, the property entrepreneur, is likely to lose its investment trust status following the deal, which is expected to be accompanied by a rights issue giving Mr Mallya a substantial stake in the enlarged business.
Its non-executive directors include Roger Regan, a well-known figure in the building industry who was recently appointed chairman of Spring Ram, the troubled kitchen sinks and bathrooms maker.
Cementone will be Mr Mallya's second UK quoted vehicle for his growing activities in Europe. A year ago he took charge of United Breweries, the regional brewing and pubs operator, after his family-controlled UB Group bought a 16 per cent interest in Wiltshire Brewery and changed its name. The company is being developed as the main overseas arm of UB Group, India's biggest drinks concern.
Cementone, based at Buckingham, manufactures a range of cement additives, own-label paints and wood preservatives, mainly for builders' merchants operating in the UK.
The company is also linked to Mr Mallya's other building interests, which include rights to the Crown and Berger paints brands in 22 countries in Africa and the Far East.
These interests, acquired from Williams Holdings, the industrial conglomerate, are managed from Britain. But it is still not clear whether they will be consolidated into Cementone before its flotation.
Mr Mallya acquired Cementone in 1988 for about pounds 12m from CH Industrials, the industrial conglomerate that later went into receivership.
It is estimated to have made a taxable profit of about pounds 3m on sales of pounds 40m last year.Reuse content