Britain’s Cairn Energy Plc is set to vote against Vedanta Ltd’s $2.3 billion buyout offer for Cairn India’s minority shareholders, the Financial Times said on Wednesday, citing people familiar with the situation.
Cairn Energy’s objections were over “fundamental disagreements over valuations”, and its preference for “holding an investment in an energy company rather than a distributed resources group,” the newspaper said, citing one person with direct knowledge of the matter.
News of Cairn Energy’s objections comes a day after Cairn India chief Mayank Ashar said the merger was on track.
Spokespeople for Vedanta and Cairn India could not be immediately reached for comment outside business hours.
A spokesman for Cairn Energy said the company had no comment on the report.
Ex-parent Cairn Energy is the single largest minority shareholder in Cairn India in which Vedanta already has a 59.88 percent stake.
State-owned insurer Life Insurance Corp (LIC), Cairn India’s second-largest minority shareholder, and which together with Cairn Energy controls about 19 percent of the Indian company, had earlier expressed reservations about the deal.
The deal is being seen by many as a test for India’s new shareholder protection law, which requires an approval of more than half of the minority shareholders to go through.