Billionaire shareholder Anil Agarwal on Monday announced plans to buy out minority shareholders in Vedanta Resources and to delist the diversified miner from the London Stock Exchange (LSE), sending the company’s stock up 28%.
Agarwal, through his family trust Volcan Investments, is offering minority shareholders 825p a share, for a consideration of £778-million. Volcan currently holds 66.5% of Vedanta.
Agarwal said in a statement that the transaction was a natural progression of Volcan’s journey to simplify the Vedanta Group's corporate structure.
“We are very proud to have been the first Indian company to be listed on the LSE in 2003, which was a major milestone for the Vedanta Group. The listing has served us well.”
“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 LSE listing is no longer necessary to achieve the Vedanta Group's strategic objectives,” Agarwal said.
In taking this step towards greater group simplification, Volcan wanted to ensure that the independent shareholders of Vedanta Resources were provided with the opportunity to exit on attractive terms, and Agarwal believes that this possible offer will deliver on that objective.
Pending transaction finalisation, Vedanta shareholders will still receive the financial year 2018 dividend of $0.41 apiece due to be paid out in August.
Vedanta jumped 28% to 828.8p on Monday, the biggest gain since its listing on the LSE in 2003.