NEW DELHI: Having failed in its attempt to delist its Indian subsidiary Vendanta Ltd., parent firm Vedanta Resources said on Monday that it would launch an open offer to buy up to 10 per cent of its shares. Vedanta Resources will offer Rs 160 per share under the offer however— a discount of 12 per cent on the stock’s Friday closing price of Rs 182.05. On Monday, Vedanta closed at a price of Rs 179.4 per share.
The move comes after Vedanta Resources failed in its attempt to delist Vedanta Ltd., in October last year since it failed to garner the requisite shareholding levels through bulk deals and an offer price of Rs 87.5 a share. Last month, the company’s promoters had gone on to increase their shareholding in the company to 55.04 per cent from 50.14 per cent. This was done through block deals worth Rs 2,959 crore.
According to market regulator SEBI’s takeover guidelines, promoters holding a stake of more than 25 per cent but less than 75 per cent shares may secure up to 5 per cent in a single financial year through gradual acquisition. Any acquisition that goes beyond 5 per cent may trigger an open offer.
The rules also say that the promoters may take another shot at delisting after a one-year cooling-off period. The group is seeking a delisting in order to clean up its current complex shareholding patterns, which will allow it to better access to consolidated resources while avoiding leakage while paying dividends.
“This is in line with our stated strategic priority for simplifying the group structure to align the group’s capital and operational structures, streamline the process of servicing the Group’s financing obligations and improve a range of important credit metrics,” Vedanta had said. The process may involve other share acquisitions as needed, it added.