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SEBI retracts,says Cairn deal not okayed

Sebi's official website this afternoon showed that the Vedanta-Cairn deal has been cleared.

Market regulator SEBI said it has not yet cleared Vedanta group’s open offer for Cairn India,a mandatory requirement for conclusion of London-based mining group’s USD 9.6 billion acquisition to foray into oil sector.

Sebi’s official website this afternoon showed that the regulator has cleared Vedanta group’s Rs 13,610 crore open offer for acquiring 20 per cent stake in Cairn India. But soon after,the market regulator corrected the information,saying that the issue was still under process.

Its website sebi.gov.in at 1700 hrs showed the status of the open offer as “under process”,a contrast from what had appeared about an hour back.

When contacted,Sebi officials said that it was “an inadvertent error” when the website showed “final observations issued” by Sebi for the proposed transaction. Sebi’s final observations are the go-ahead for an open offer. The official said that the open offer was yet to be cleared by Sebi.

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London-listed Vedanta had in August last year agreed to buy up to 51 per cent stake in Cairn India from Cairn Energy Plc. Following the acquisition,its group firm Sesa Goa was to make an open offer for buying an additional 20 per cent in the company that owns India’s largest onland oil field.

But the company could not make the open offer following an oil ministry intervention with SEBI. The ministry said the deal was contingent upon government approval,which is still under process.

SEBI is holding back the approval for the open offer as the government is yet to give its go ahead.

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Some in Cairn/Vedanta had wanted to delink the government approval and the open offer saying even if the State consent was not to come,Vedanta could become a minority shareholder in Cairn India.

But SEBI has refused to delink the issue as the Rs 355 per share open offer price is part of the USD 9.6 billion transaction and the open offer can only be made if the original deal had been concluded.

The Rs 13,631 crore open offer was first scheduled to open on October 11 and close on October 30,but following the oil ministry letter,SEBI refused to give approval to the issue.

First published on: 14-03-2011 at 04:11:39 pm
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