Cairn India to merge into Vedanta: 5 key points from the deal

By: | Updated: July 25, 2016 1:03 PM

Cairn India and Vedanta on Friday approved the final and revised terms for the merger.

cairn india vedantaCairn India and Vedanta on Friday approved the final and revised terms for the merger. (Reuters)

Cairn India and Vedanta on Friday approved the final and revised terms for the merger. In a BSE filing, Cairn India said, “The Boards of Cairn India and Vedanta have approved revised and final conditions for the deal, taking into account prevailing market conditions and having regard to underlying commercial factors.”

Below are five things you should know about the transaction:

1) According to the revised terms, Cairn India’s minority shareholders will receive 1 equity share and 4 redeemable preference shares with a face value of Rs 10 in Vedanta, for every share held by them in Cairn India. After a period of 18 months, the preference shares will be redeemed. However, shareholders will also have an option to redeem the same within 30 days of allotment.

2) The share swap ratio translates into an implied premium of 20 per cent to one month volume-weighted average price of Cairn India share price.

3) Following completion of the transaction, Vedanta plc ownership in Vedanta Limited is expected to fell to 50.10 per cent from its current 62.90 per cent shareholding. Cairn India minority shareholders will own 20.2 per cent and Vedanta minority shareholders will own a 29.70 per cent stake in the enlarged entity.

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

5) Anil Agarwal, chairman of Vedantain June last year announced merger of Cairn India with Vedanta in a $2.3 billion all-share deal to create India’s largest diversified natural resources company. That time, it was announced that shareholders of Cairn India will get one ordinary share and 7.5 per cent redeemable preference share of Vedanta with a face value of Rs 10.

(With agency inputs)

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