Volcan to buy remainder of Vedanta for £778m

4 July 2018 (Last Updated July 6th, 2018 11:02)

Volcan Investments, a family trust of UK-headquartered diversified metals and mining company Vedanta Resources majority shareholder and chairman Anil Agarwal, has offered to acquire the remaining stake in Vedanta for £778m.

Volcan to buy remainder of Vedanta for £778m
An Employee at work at a smelter at Vedanta’s Jharsuguda aluminium smelter plant in Odisha, India. Credit: Vedanta Resources.

Volcan Investments, a family trust of UK-headquartered diversified metals and mining company Vedanta Resources majority shareholder and chairman Anil Agarwal, has offered to acquire the remaining stake in Vedanta for £778m.

The proposal values the total issued share capital of Vedanta at £2.32bn. The offer is aimed at simplifying the corporate structure of Vedanta and its subsidiaries.

Under the terms of the proposal, Volcan has offered £8.25 per share for the rest of the shares it does not already own in the firm.

“We wanted to ensure that the independent shareholders of Vedanta Resources were provided with the opportunity to exit on attractive terms and I believe this possible offer will deliver.”

Volcan, which already holds a 66.53% stake in Vedanta, is also expected to offer the FY2018 dividend of $0.41 per Vedanta share to the shareholders next month.

Once the transaction is completed, the family trust intends to delist Vedanta from the London Stock Exchange.

Agarwal said: “The London listing has served us extremely well since that time. However, given the subsequent growth of our underlying businesses and the maturity of the Indian capital markets, together with related feedback from our shareholders and other stakeholders, we have concluded that a separate London listing is no longer necessary to achieve the Vedanta Group’s strategic objectives.

“In taking this important step towards greater group simplification, we wanted to ensure that the independent shareholders of Vedanta Resources were provided with the opportunity to exit on attractive terms, and I believe this possible offer will deliver on that objective.”

An Independent Committee of the board of Vedanta, which was formed to review and evaluate the proposal, has extended support to the offer and intends to recommend a firm offer to shareholders.

A firm offer is conditional on several conditions, including approval from Vedanta’s independent shareholders and the completion of due diligence.

In May this year, the company shut down a copper smelter in the Indian state of Tamil Nadu after demonstrators protested against a planned expansion of the plant and the resultant confrontation with police forces caused the death of 13 people.

Vedanta operates across India, Zambia, Namibia, South Africa, Liberia, Ireland and Australia, with primary interests in copper, zinc, silver, aluminium and other segments.