India: Vedanta sweetens Cairn deal terms after takeover delayed

India‘s Vedanta Ltd has offered to sweeten the terms for taking over subsidiary Cairn India Ltd after an initial bid had been stymied for a year.

Under the new offer, Vedanta will give one share and four redeemable preference shares for each share in Cairn India, the company controlled by mining and metals tycoon Anil Agarwal said in a statement on Friday.

Earlier it was offering one share and one redeemable preference share for each Cairn share.

The deal, which will give debt-ridden Vedanta access to oil and gas explorer Cairn India‘s $3.5 billion cash pile, has faced opposition from some big minority shareholders. Vedanta must get on board Indian state-run Life Insurance Corp (LIC) and UK-based Cairn Energy Plc, which own 10 per cent each in Cairn India, to seal the takeover.

LIC and Cairn Energy declined to immediately comment on the new offer on Friday.

Vedanta shareholders will vote on the new offer on September 8, while Cairn India shareholders will vote on September 12.

The new terms give a premium of 20 per cent to the volume-weighted average price of Cairn India‘s stock price over the past month, Vedanta said.

One analyst said the new offer was in line with an increase in the shares of both companies since the deal was announced and with recent greater stability in global crude oil prices.

“The revised terms seem definitely more attractive and conducive than (the offer) in the past,” said Jigar Shah, chief executive at Maybank Kimeng Securities India Pvt Ltd.

Navin Agarwal, chairman of Cairn India, had said on Thursday he expected the deal to be completed by the end of the current fiscal year through March.

Ahead of the announcement, shares in Cairn India closed 8.7 per cent higher, their biggest single-day gain in seven years. Vedanta Ltd shares gained 7.4 per cent.

Also Read:

Cairn India expects merger with Vedanta by March-end
India: Vedanta’s Anil Agarwal to invest $10b to build country’s first LCD plant

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.