Vedanta Resources

Monday, 2nd July 2018 09:40 - by Rajan Dhall

Big news this morning as Volcan have submitted a bid for Vedanta Resources.  The possible recommended all cash offer to be made by Volcan stands at a price of 825 pence per share, this values Vedanta at GBP2.33 billion. Volcan is a holding company wholly owned by the Anil Agarwal discretionary trust, the trust currently own 67% of Vedanta. Should this offer be successful Vedanta is sure to be delisted in the UK.

Mr Agarwal stated "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," Agarwal said. 

With the recent trade wars and drop in commodities prices VED has been falling recently. On the chart you can see the offer is significantly higher than the close on Friday. I think a longer term aim for the Indian miner is to list in India, for a long time the market has not been sophisticated enough for Volcan but owning that much of a share in the first place means the trust can simplify the business and maybe find more investors abroad (in their home country)

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.