Vedanta is a great opportunity for Cairn shareholders: CEO

Vedanta recently sweetened its merger offer to Cairn India shareholders from one equity share and one redeemable preference share for each share held in Cairn India to one equity share and four redeemable preference shares.

Can you take us through the deal?

Getting into Vedanta is a great opportunity on multiple fronts. One, Cairn shareholders will get access to multiple businesses, commodity businesses strongly linked to India’s growth, their trophy assets, world-class assets — low cost and much longer life than Cairn assets.

Being a part of the entire story, de-risks the earnings for Cairn India shareholders, and that is the most important thing. The deal has three more spoons of sugar in it now and it should be quite appealing to the shareholders of Cairn India, particularly the minority shareholders.

Do you think that the commodity cycle has recovered from the lows and helped in turning the sentiment, in addition to your sweetening the offer?

The offer is built upon the understanding of investment banks and firms, which have been involved in the valuation, as well as in the fairness of opinion. Besides that, over the last one year, we have engaged with shareholders at the Cairn level and have listened to them.

Given the regulatory issues, we can’t obviously get into discussions and alienate on one-and-one basis and give differential information.

But the offer certainly takes into account what we have heard, besides taking into account the change in the commodity prices over the years.

On the other hand Vedanta has gone through the commodity cycle as well. And if you look at where those commodities are, it reflects the differential pricing.

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