Companies

Anil Agarwal offers $1 b to take Vedanta Resources private

Vidya Ram London | Updated on July 31, 2018

This September 2014 photograph shows Vedanta Resources chief Anil Agarwal at the London Stock Exchange on the 10th anniversary of the company’s listing on the bourse   -  PTI

Says London listing no longer needed to achieve company’s ‘strategic objectives’

Anil Agarwal’s efforts to take Vedanta Resources private moved a step forward on Tuesday, as the company said it would recommend a $1.028-billion offer for the share capital not currently owned by Volcan Investments.

Following the extension of a deadline to continue discussions with lenders, Vedanta Resources and Volcan Investments — the holding company wholly owned by Agarwal’s discretionary trust — outlined details of the recommended cash offer of £8.25 a share, which is a near-28 per cent premium on the closing price of Vedanta Resources on the Friday before the offer was first announced on July 2.

The offer was for the 33.47 per cent stake that Volcan Investments doesn’t already own, and values the whole company at $3.07 billion.

‘Natural progression’

Agarwal said the acquisition of the remaining shares was a “natural progression” for the company and that while a London listing had served the company “extremely well” since 2003, it was no longer necessary for the company to achieve its “strategic objectives”.

Alongside representing an attractive premium, the offer in cash provided certainty, while investors would still be able to reinvest the proceeds in Vedanta Limited — it generates the majority of the group’s profits and cash flow — either through shares in India, or American Depository Receipts in New York, Volcan Investments said.

“This is an attractive offer for independent Vedanta Shareholders,” said Deepak Parekh, the chairman of the independent committee that reviewed the offer.

“It secures delivery of future value today in cash, whilst providing shareholders with the ability, should they choose, to retain exposure to the Vedanta Group growth story by reinvesting all or part of their offer proceeds in Vedanta Limited,” he added.

The increased maturity and liquidity of the Indian markets had “diminished the rationale” for maintaining a UK entity, he added.

Published on July 31, 2018

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