Vedanta delisting fails; company to return all the shares tendered

Billionaire Anil Agarwal’s Vedanta Resources on Saturday said that they have failed to garner the required number of shares to delist Indian subsidiary Vedanta.

The total number of shares validly tendered by the public shareholders in the delisting offer is 125.47 crore, which is less than the minimum number of shares required to be accepted by the acquirers in order for the delisting offer to be successful, the company said in an exchange filings.

The promoters will not acquire any shares tendered by the public shareholders in the delisting offer and all the shares tendered will be returned to the respective public shareholders, it added.

Bankers and promoters on Friday approached market regulator Sebi to grant an extension of one day but Sebi did not grant any extension, according to sources.

In May, the promoters of Vedanta announced a delisting offer at Rs 87.5 per share. Later in June in a special resolution by postal ballot, 93.3% of all shareholders and 84.3% of public shareholders have approved to delist the shares of Vedanta.

Vedanta is the third company to make unsuccessful delisting efforts in last two years after INEOS Styrolution and Linde India.

LIC, which held 6.37% in Vedanta, submitted all its shares at a price of Rs 320, a 267% premium over the floor price of Rs 87.25 upsetting Vedanta’s calculations. The LIC bid price is now the discovered price for the reverse book building process. Many other investors too bid at Rs 320 but a lot of bids were also submitted at Rs 150-160 per share.

Indian delisting rules require all companies to offer to buy shares from public shareholders at a `discovered’ price through a reverse book building process. The process requires 90% acceptance from all shareholders. The discovered price refers to the bid price of the shares which help the process cross the threshold or acceptance level.

Share of Vedanta gained 3.7% on Friday to close at Rs 121.95 on BSE.

Last month Baring Private Equity Asia successfully closed the delisting process of IT company Hexaware Technologies by accepting the discovered price of Rs 475 a share against Rs 285 offered initially to minority investors.

The biggest delisting so far in India was from the Essar group which took Essar Oil private after paying Rs 3,745 crore in 2015. The discovered price in Essar Oil was 146% premium to the offered price. In early 2019, the delisting process of Linde India failed after investors demanded a premium of 517% over offered price.