Cairn: Vedanta plunges 5.59 per cent on LSE amid talks to buy Cairn stake

LONDON/MUMBAI – Shares in Vedanta Resources, run by NRI billionaire Anil Agarwal, fell 5.59 percent on the London Stock Exchange on Friday amid talks it could acquire a controlling stake in India arm of Cairn Energy.

By late afternoon, the scrip was trading at £20.61, down 5.50 percent from the LSE. Vedanta opened on a positive note but soon swung into the red.

The broader market was also weak with the benchmark FTSE 100 trading at 5,248.95, down 0.32 percent in late afternoon trading.

On the other hand, Cairn Energy Plc was up 1.41 per cent to trade at £4.59 on the LSE.

Also in India, Sterlite Industries, a Vedanta Group company, fell over 4 percent to close at Rs 160.70 on the Bombay Stock Exchange. Sterlite was the biggest loser in the Sensex pack today.

In contrast, Cairn Energy Plc’s Indian arm, Cairn India, rose over 5 per cent to hit an all-time high of Rs 358 on the BSE. The scrip ended up gaining 355.45, up 4.36 percent.

Vedanta Resources Plc is in talks to acquire a 51 per cent controlling stake in Cairn India for around US$8-8.5 billion (nearly Rs 40,000) and a deal could be announced Sunday evening or Monday.

Scottish explorer Cairn Energy Plc, which holds a 62.37 percent stake in India-listed Cairn India, is targeting a premium of up to 20 percent for passing on the majority stake, two people familiar with the development said.

Agarwal “is meeting Cairn Energy Plc chief executive Bill Gammell in London today and the deal will likely be announced as early as Sunday evening or Monday,” one of them said.

The deal will be subject to government approval as Cairn’s three producing oil and gas assets, including the vast Rajasthan fields, and seven exploration blocks have either express provisions for obtaining prior approval prior to the transfer of interest or a right of first refusal or granting the right of first refusal when selling shares to partners such as ONGC. Cairn: Vedanta plunges 5.59 per cent on LSE amid talks to buy Cairn stake

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