Vedanta To buy 51-60% In Cairn India for $8.5-9.6 Bn
Vedanta Resources Plc is set to acquire between 51%-60% stake in Cairn India Ltd for around $8.5-9.6 Bn (nearly Rs.40,000 Cr) in cash from Cairn Energy Plc.
The deal will value Cairn India at around $16.6 Bn. Cairn India was valued at $13.7 bn by close of trade on Friday, valuing Cairn Energy's 62.37% stake at $8.5 bn, the same amount Vedanta is paying for 51% stake.
Vedanta is buying stake at Rs. 405 per share (includes Rs.50 as a non-compete fee), a premium of about 32% Cairn India's average closing price for 90 days prior to August 14.
Vedanta will fund the deal through debt and cash, with the proposed transaction expected to close by the first quarter of 2011.
Sesa Goa will held 20% stake in Cairn, while Vedanta will directly hold 31-40% stake.
If the deal goes through, Vedanta will also make an open offer to shareholders of Cairn India other than Cairn Energy to acquire up to 20% of Cairn India.
Cairn Energy plans to return a "substantial amount" of the sale proceeds to its shareholders and use part of the cash to fund its exploration and appraisal programmes.
Transaction Reference: ET
Edinburgh-based Cairn Energy is selling the majority of its 62.37% stake in Cairn India to Vedanta. But the deal is contingent upon the government approval. Post-deal, Cairn Energy Plc will hold 10.6% to 21.6% in Cairn India.
However, Sebi has now proposed for revising open offer size to up to 100%, in which case Vedanta would have to offer to acquire the entire company.
In fact, in 2005, Cairn Energy had offered its interest in the Rajasthan and other fields to ONGC for close to $5 bn, but when ONGCdid not agree with the valuation, it floated a India unit and listed the firm on the stock exchanges in 2006.
Cairn India's main asset is a 70% stake in the Rajasthan oil development project that holds an estimated 6.5 billion barrels of oil and gas.
Cairn India produces about 125,000 barrels of oil per day (bopd).
Cairn India repored a net operating income of Rs.841 Cr for Q1 FY2011 with a net profit of Rs.281 Cr for the same quarter.
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KVEZAR VIEW
| Date | Transaction | Type | Buyer | Size ($mn) |
|---|---|---|---|---|
| 13/07/11 | Cairn India - Vedanta Resources (Tranche 1) | M&A | Sesa Goa Limited | 1527.96 |
| 27/06/11 | Cairn India - Vedanta Resources (Tranche 2) | M&A | Sesa Goa Limited | - |
| 05/05/11 | Cairn India - Vedanta Resources (Open Offer) | M&A | Sesa Goa Limited | 1234.57 |
| 19/04/11 | Petronas - Cairn India - Vedanta Resources | M&A | Vedanta Resources plc | 1481.65 |
| 19/04/11 | Cairn India - Petronas (Exit) | M&A | 618.23 | |
| 14/10/09 | Cairn India - Petroliam Nasional Berhad | M&A | Petroliam Nasional Berhad | 250.00 |
| 17/03/08 | Cairn India - Petroliam Nasional Berhad, | Private Equity | Petroliam Nasional Berhad | 625.00 |
| 15/12/06 | Cairn India Limited - IPO | IPO / Offerings | 1177.96 | |
| 03/10/06 | Cairn India - International Finance Corp. | Private Equity | International Finance Corporation | 45.00 |
| Date | Type | Buyer | Target | Size ($mn) | State |
|---|---|---|---|---|---|
| 03/02/12 | Private Equity | Goldman Sachs Capital Partners | Aban Offshore Limited (Aban Loyd Chiles Offshore Limited) | 4.59 | Completed |
| 25/01/12 | M&A | ONGC Videsh Limited | OAO Yamal LNG | - | Planned |
| 23/01/12 | M&A | Ocean Sparkle Limited | Tag Offshore Limited | 79.68 | Called Off |
| 12/01/12 | M&A | Oil India Limited | Cove Energy Plc | - | Planned |
Company |
||||
| Name | Promoters | Office | Competitor | Website |
|---|---|---|---|---|
| Cairn India Limited | Cairn Energy Plc | 101, West View Veer Savarkar, Marg,Prabhadevi, Mumbai-400025. Maharashtra, India. 400025 |
Oil & Natural Gas Corporation Limited Oil India Limited Reliance Industries Limited Essar Oil Limited Interlink Petroleum Limited |
www.cairnindia.com |
| Sesa Goa Limited | Vedanta Resources plc | Sesa Ghor 20 Edccomplex Patto , Panjim – 403001, Goa. |
NMDC Limited Gujarat NRE Coke Limited |
www.sesagoa.com |
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