NRI billionaire and chairman of London-based Vedanta Group Anil Agarwal on Tuesday said the company has received the Securities and Exchange Board of India’s (SEBI’s) approval for the mandatory open offer through group firm Sesa Goa to buy 51% in Cairn India. The approval was necessary under takeover norms prescribed by SEBI.
The approval comes seven months after London-listed Cairn Energy agreed to sell up to 51% in its Indian unit to Vedanta in a deal valued at up to $9.6 billion (Rs 43,200 crore).
“SEBI has given its clearance and the open offer will come within next week,” Agarwal, said.
The Vedanta chief also appeared confident that the deal will soon receive government approval as well. “We have a deadline of April 15 and I believe the government will give its approval before that... The royalty issue has to sorted out with the government and the ONGC. We can take up that issue later.”Once the Centre approves the deal, the two firms can approach their shareholders seeking extension of the April 15 deadline, saying that conclusion now remains a mere formality. However, due to delay in getting regulatory clearances, the Vedanta Group will have to announce fresh schedule for the open offer.
On August 17, 2010, just two days after the announcement of the deal, the Vedanta group had offered to acquire up to 20% stake from public shareholders for Rs 355 per share. The Rs 13,631-crore open offer was then scheduled to open on October 11 and close on October 30.
As per SEBI’s Takeover Code, the acquirer is required to come out with an open offer to give an exit option to existing shareholders. Any deal involving the acquisition of 15% or more stake in a listed company requires the acquirer to make an open offer for 20% stake buy from public shareholders and the offer needs to be approved by SEBI.
Cairn India shares closed down 0.8% at Rs 364 on the Bombay Stock Exchange.