Vedanta tycoon makes £800m swoop to take miner private
Manufacturers still in the doldrums as uncertainty means orders are on hold
BILLIONAIRE mining tycoon Anil Agarwal is spending nearly £800 million to take his London-listed Indian group Vedanta Resources private.
The 64-year-old, who owns 66.5% of Vedanta Resources through his Volcan unit, has offered to buy the shares he does not already own.
He said London was no longer needed as a venue to host the company, which has been embroiled in controversy over deadly protests, as India’s finance world was now developed enough to support the company alone.
Vedanta was the first Indian company to list in London in 2003.
The 825p-per-share offer, plus dividends, values the FTSE 250 group at £2.3 billion. The shares not currently owned by Volcan are worth £778 million.
The shares surged 26.3%, up 170.6p, to 815.2p, just shy of the offer price.
Agarwal said: “We have concluded that a separate London listing is no longer necessary to achieve the Vedanta Group’s strategic objectives.”
He added the move would help “simplification” of his sprawling empire.
JPMorgan is advising Agarwal and Lazard is supporting the independent committee of the company, chaired by Vedanta’s senior independent director Deepak Parekh.
The independent committee has decided to support the offer.
“It represents a 27.6% premium to the undisturbed share price,” Parekh said.
The Vedanta share register includes blue-chip investors such as Standard Life Aberdeen, BlackRock and Legal & General. Retail shareholders are also represented t h ro u g h p l a t fo r ms l i ke Equiniti, Interactive Investors and Hargreaves Lansdown.
Vedanta attracted political ire this year after protests at one of its plants led to the death of 13 protesters. Protesters in the South
Indian city of Thoothukudi UNCERTAINTY is still sapping UK manufacturers after another month of “subdued” growth, industry-watchers warned today.
The Chartered Institute of Procurement & Supply’s latest snapshot of industry activity, where a score of 50 signals expansion, barely budged at 54.4 in June, well below the faster growth rates signalled earlier in the year.
Survey compiler IHS Markit noted the weakest business confidence in seven months as well as the weakest quarter for the sector since the end of 2016. The sector, accounting for around 10% of the overall economy, remains on a “subdued footing”.
Cips director Duncan Brock said: “The undercurrent of uncertainty was once again the main culprit as clients hesitated to place orders.” Fears over a trade in Tamil Nadu demanding the closure of a copper smelter owned by Vedanta were fired on by police.
Residents in the area accused the company of polluting water supplies in the area although it has denied breaking any laws. Protesters also burnt an effigy of Agarwal, a former scrap metal dealer who has risen war also took their toll after some firms fretted over possible future trade tariffs, Cips added.
Firms also fuelled expansion by building stockpiles although this is unsustainable over the longer term, experts said.
The data will give food for thought for the Bank of England mulling whether to hike rates again in August. to become one of the world’s richest mining magnates.
Following the tragedy, Labour shadow chancellor John McDonnell called on UK regulators to force Vedanta to delist “to remove its cloak of respectability”.
Vedanta Resources is made up of two main subsidiaries, a 50.1% stake in Indian-listed Vedanta Limited and a near-80% shareholding in copper mine KCM, which is based in Zambia.