Vedanta Resources looks to be only a month away from leaving the London market after the revised conditions for Volcan Investments takeover of the company were met.
Volcan Investments, the majority owner of Vedanta with a 66.5% stake, has now made its £8.25/share ($10.65/share) bid unconditional after it received acceptances for its offer from shareholders representing more than 75% of outstanding stock.
“The offer is being extended and will remain open for acceptances until further notice,” Volcan said on September 3.
The company said in it is initial July 2 offer announcement that it planned to delist Vedanta from the London markets. Following the latest declaration, it expects this to take place on October 1, 20 business days from the latest announcement.
Volcan says the delisting and takeover transaction, which values the company at £2.33 billion, would be “another important step in simplifying the structure of the Vedanta Group”. It would leave the company with a listing in India, which it says provides ample opportunities for existing shareholders to trade shares.
Prior to this transaction, the company had merged Vedanta with energy subsidiary Cairn India to try to simplify the corporate structure and achieve an improved market valuation.
The company also said Volcan’s original aim with the 2003 London listing – to “provide a platform to access a deeper pool of equity and debt capital in the United Kingdom and global markets” – was now “less compelling, given the increased maturity of the Indian capital markets, together with Vedanta Limited’s significant growth”.
The Gamsberg zinc project, in the Northern Cape of South Africa, is part of this growth. The mine is expected to move into commercial production this month on its way to ramping up to 250,000 t/y of zinc concentrate output.
As of 13:00 (London time) on August 31, Volcan had received valid acceptances of the offer in respect of 72.73 million Vedanta shares, representing approximately 25.8% of Vedanta Resources and some 77.04% of the Vedanta shares to which the offer relates.
Vedanta is not the only London-listed company to count Volcan Investments as an investor. The firm, which is majority owned by Indian business entrepreneur Anil Agarwal, also holds close to 20% of Anglo American.