Vedanta says Cairn India open offer price final
Vedanta Resources said today the open offer price for Cairn India's minority shareholders is the final price, but added that it cannot move forward with the offer until it gets regulatory approval.business Updated: Oct 11, 2010 14:14 IST
Vedanta Resources said on Monday the open offer price for Cairn India's minority shareholders is the final price, but added that it cannot move forward with the offer until it gets regulatory approval.
"We have given a very lucrative offer and that offer we stand by," Vedanta Chairman Anil Agarwal told reporters at a press conference on Monday, referring to the price of 355 rupees a share. He said he expected the offer to get regulatory approval in a few days.
Earlier in the day, the Business Standard newspaper reported Vedanta was considering raising the price to 405 rupees a share, the same as it offered the London-based parent Cairn Energy Plc.
Cairn Energy Plc, which agreed in August to sell a stake of 40 to 51 percent in Cairn India to London listed miner Vedanta Resurces, is hopeful the deal will close by the end of the year, its Chief Executive Bill Gammell said at the same event.
However, Gammell added that the deal needs several approvals from the Indian government, preventing him from knowing with certainty how long the closing could take.
He apologised for the news of the deal leaking through the media before he had informed the Indian government about it, adding that he was optimistic the deal would be approved.
Cairn investors were concerned that ONGC might scupper the sale after it said in September it was "not passive" to the agreement.
But India's Oil Secretary S Sundareshan has downplayed the chances of ONGC seeking to pre-empt the sale, saying it would be too expensive a purchase for the state-run firm.
Sundareshan said that official approval of a deal could be pushed into next year, although a decision was expected by year-end.
Also, Vedanta will have to prove technical competence in order to receive approval for the deal, Sundareshan said, although the fact Cairn India's management is expected to stay in place suggests this may not be a problem.
Cairn's Gammell said on Monday the firm would give "billions of dollars" of sale proceeds to shareholders and spend much of the rest on exploration in Greenland, where two wells have found evidence of oil and gas.