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Cairn India, Vedanta Gain All Required Approvals to Close Merger.

M2 EQUITYBITES-March 29, 2017-Cairn India, Vedanta Gain All Required Approvals to Close Merger

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29 March 2017 - Indian minerals and oil and gas explorer Cairn India (NSE: CAIRN) has now received all the required approvals in relation to its Scheme of Arrangement with UK-based natural resources company Vedanta Ltd (NYSE: VEDL), the company said.

Under a deal originally announced in June 2015, minority shareholders of Cairn India would receive one equity share in Vedanta Ltd and one redeemable preference share in Vedanta Ltd. with a face value of INR 10 for each equity share held.

This represents an implied premium of 7.3% to the previous close.

Under a revised deal from July 2016, each Cairn India minority shareholder will receive for each equity share held 1 equity share in Vedanta Ltd.; and 4 redeemable preference shares with a face value of INR 10 in Vedanta Ltd., with a coupon of 7.5% and tenure of 18 months from issuance.

This implies a premium of 20% to one month VWAP of Cairn India share price.

Both companies said that the recent commodity price environment has further strengthened the strategic rationale of the transaction.

Vedanta Resources produces aluminium, copper, zinc, lead, silver, iron ore, oil and gas and commercial energy.

The company has operations in India, Zambia, Namibia, South Africa, Ireland,Liberia, Australia and Sri Lanka. With an empowered talent pool globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth.

Vedanta's business primarily involves exploring and processing minerals and oil and gas. The company produces oil and gas, zinc, lead, silver, copper, iron ore, aluminium and commercial power and has a presence across India, South Africa, Namibia, Ireland, Australia, Liberia and Sri Lanka.

J.P. Morgan Cazenove and Morgan Stanley are acting as joint financial advisors and joint corporate brokers to Vedanta plc in relation to the transaction.

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Publication:M2 EquityBites (EQB)
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Date:Mar 29, 2017
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