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The London-listed Vedanta Group has got the Securities and Exchange Board of India's approval for its subsidiary Sesa Goa to launch an open offer to acquire 20 per cent of Cairn India. SEBI uploaded its final observations on the matter on its Web site on Tuesday.
“We have already received SEBI's approval for an open offer. The issue will open very soon. Within the next one to two days, we will send out the mails regarding this to all concerned,” the Vedanta Group Chairman, Mr Anil Agarwal, told reporters on the sidelines of a FICCI event.
Open offer
Cairn Energy is selling a maximum of 51 per cent stake in its Indian arm, Cairn India Ltd, to Vedanta Resources for up to $8.48 billion. However, any deal involving acquisition of a stake of 15 per cent or more in a listed company requires the acquirer to make an open offer for 20 per cent stake purchase from public shareholders and this offer needs to be approved by SEBI.
Vedanta will carry out the open offer through its subsidiary Sesa Goa. SEBI's approval raises hopes for Vedanta to complete the acquisition of a majority stake in Cairn India, which is the biggest acquisition proposal in the country's petroleum sector.
Offer price remains
Mr Agarwal said that there will be no change in the open offer price for Cairn India. In October 2010, when the deal was originally scheduled to go through, Sesa Goa had offered Rs 355 a share to Cairn India's minority shareholders.
The Vedanta chief also seemed confident that the Government will give its approval to Vedanta buying a majority stake in Cairn India. Mr Agarwal urged the Government to treat the acquisition purely as a “corporate transaction” between Cairn Energy and Vedanta, while the royalty disputes between ONGC and Cairn India should be “taken up separately”.
“We have a deadline of April 15 and I believe the Government will give its approval before that,” he added.
Cairn Energy had sought permission of the Government to clear the deal in September 2010. However, a decision on the matter has been delayed. One of the reasons for the delay was that public sector company ONGC, Cairn India's partner in the Rajasthan oil block, is seeking redressal on the issue of royalty payment. ONGC, which holds 30 per cent stake in the Rajasthan block, also pays royalty for Cairn's 70 per cent stake.
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