Vedanta’s revised offer price better deal for minority shareholders, says Edelweiss
Vedanta Resources and persons acting in concert with it (promoter group) on Tuesday increased the offer size and price for the voluntary open offer for
to Rs 235 per share for 65.1 crore shares (17.5 per cent of total equity share base) from the previous Rs 160 for 37.17 crore shares (10 per cent).
“The revised offer represents a 4 per cent premium to the current market price (CMP), a better deal for investors than the earlier offer price that implied a discount of 13 per cent to the CMP then,” Edelweiss said.
However, the fragmented nature of shareholding may affect tendering of shares, it said.
The total consideration assuming the full tendering of shares in the open offer would be Rs 15,300 crore.
“We understand that promoter group has tied up an additional debt facility of USD 1.2 billion, 8.95 per cent due 2025. The proceeds might be partially utilised for funding the acquisition of shares in the open offer,” the brokerage said.
Hence, total debt at Vedanta Resources (standalone) would increase to USD 8.2 billion.
“While the increased shareholding in Vedanta would fetch them an additional cash distributed through dividend, we believe that debt servicing concerns still persist,” it said.
Over the medium term, it is expected that the leverage at the parent’s end would rise while higher shareholding would result in a higher share of dividend from Vedanta.
