Vedanta Resources Shareholders Approve Cairn India Merger
06 September 2016 - 10:43PM
Dow Jones News
By Ian Walker and Alex MacDonald
LONDON--Vedanta Resources PLC's (VED.LN) troubled merger between
Vedanta Ltd. and Cairn India Ltd. (532792.BY) took a step closer
toward completion on Tuesday after Vedanta shareholders gave the
deal the green light at a general meeting.
All of the votes cast were in favor of the merger at Tuesday's
meeting. These represent 83.7% of the company's total voting
capital. The deal still needs to be approved by Cairn India
shareholders at a meeting to be held on Sept. 12.
The agreement, announced more than a year ago, aims to merge the
Indian operating unit of billionaire Anil Agarwal's U.K.-listed
Vedanta Resources with its majority-owned oil and gas firm Cairn
India. Vedanta Resources already owns a near 60% stake in Cairn
India and close to 63% of Vedanta Ltd.
The deal, however, had a lukewarm response from some of Cairn
India's largest minority shareholders who hold sway over any
vote.
In an effort to boost shareholder interest, Vedanta Ltd.
sweetened the deal on July 25 by offering one Vedanta share and
four preference shares with a 7.5% annual coupon for each Cairn
India share, up from a previous offer of one share and one
preference share.
The new offer implied a one-fifth premium to Cairn India's
volume-weighted average price over the previous month, up from a
7.3% implied premium to the closing share price before the deal was
announced in June last year.
Vedanta said in July it expects the deal close in the first
quarter of 2017.
"The strategic rationale for merging Vedanta Limited and Cairn
India remains highly compelling," said Tom Albanese, Chief
Executive of Vedanta Resources at the time of the revised offer.
"We are confident that the financial strength and diversified
portfolio of [Vedanta's] Tier-I assets will provide de-risked
earnings and stable cash flows, driving long-term value," said
Sudhir Mathur, chief financial officer and acting CEO of Cairn
India July.
The revised offer terms have been approved by the boards of both
companies involved in the tie up.
Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749 and
Alex MacDonald at alex.macdonald@wsj.com.
(END) Dow Jones Newswires
September 06, 2016 08:28 ET (12:28 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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