Vedanta Resources rolls out open offer for India unit stake

LAST MONTH, THE PROMOTERS HAD INCREASED THEIR STAKE FROM 50.14% TO 55.04% VIA BULK DEALS TOTALLING ₹2,959 CRORE

NEW DELHI: After a failed delisting and buying shares in bulk deals, Anil Agarwal-led Vedanta Resources Plc. has launched a voluntary open offer to acquire up to 10% stake in flagship Indian firm Vedanta Ltd.

The parent has offered to buy up to 37.17 crore shares from public shareholders of Vedanta at ₹160 apiece, according to an exchange filing. If successful, that will cost ₹5,948 crore.

The price announced on Sunday is a 12% discount to Friday’s closing price of ₹182.05.

Vedanta shares were nearly 3% down on Monday and were trading around ₹179. In October last year, Vedanta Resources had failed to garner the required number of shares to delist its Indian arm at the offer price of ₹87.5 apiece.

Last month, promoters had increased their stake from 50.14% to 55.04% through block deals totalling ₹2,959 crore.

As per Sebi’s takeover code, promoters holding more than 25 per cent but less than 75 per cent shares can buy up to 5 per cent through creeping acquisition in one financial year.

Any acquisition of shares beyond 5 per cent may trigger an open offer.

The promoters can after a one-year cooling-off period, can take another shot at delisting that will simplify the group’s complex shareholding structure and allow it better access to consolidated cash while avoiding leakage during dividend distributions.

“The Acquirer (Vedanta Resources) together with PACs is making a voluntary open offer for the acquisition of up to 37,17,50,500 equity shares, representing 10% of the fully diluted voting share capital of the target company (Vedanta Ltd),” the filing said.

At the time of raising its stake last month, Vedanta Resources had said the move was aimed at simplifying the group structure.

“This is in line with our stated strategic priority for simplifying the group structure to align the group’s capital and operational structures, streamline the process of servicing the Group’s financing obligations and improve a range of important credit metrics,” the promoter company had said.

The simplification process— which has been underway for several years—has involved mergers of group companies and may involve other share acquisitions in accordance with applicable law, the company had said.

Moody’s Investors Service had in October stated that Vedanta Resources Ltd’s (VRL) failed attempt to take full ownership of its profitable operating subsidiary Vedanta Ltd will weaken liquidity.