Vedanta share price up over 26 per cent as Indian metals tycoon announces buyout

Mary McDougall
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Agarwal plans to cancel Vedanta's London listing claiming the company no longer needs access to UK capital (Source: Getty)

Vedanta Resources today revealed plans to de-list from the London Stock Exchange, with its share price jumping over 26 per cent on the news.

Chairman Anil Agarwal has struck a deal to buy out Vedanta's minority shareholders through his family trust Volcan Investments, with an offer price of 825p per share. The move is part of the Indian metals tycoon's plan to simplify the commodities group's structure.

The offer of almost £800m values the mining conglomerate at £2.33bn and represents a 27.6 per cent premium to Vedanta's close on Friday of 646.8p.

Shareholders will also be entitled to a previously announced dividend of 31p per Vedanta share. Including the dividend payment, the total offer is valued at 856p per share.

"I am pleased to announce this initiative, which is a natural progression of our journey to simplify the Vedanta Group's corporate structure" Agarwal said in a statement today.

Vedanta was the first Indian company to list on the London Stock Exchange, floating in 2003.

"The London listing has served us extremely well since that time. However, given the subsequent growth of our underlying businesses and the maturity of the Indian capital markets, together with related feedback from our shareholders and other stakeholders, we have concluded that a separate London listing is no longer necessary to achieve the Vedanta Group’s strategic objectives” Agarwal continued.

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The news follows a tumultuous few months for the commodities group. Its shares plunged in May as it was forced to shut a copper smelter in southern India following deadly protests. Vedanta's shares were trading above 850p before the drop in May.

Agarwal is also Anglo American's biggest shareholder with a nearly 20 per cent stake through Volcan. The Vedanta buyout is likely to fuel further speculation about his ambition for the FTSE 100 miner.

Mr Agarwal has previously tried to merge Hindustan Zinc, a Vedanta subsidiary, with Anglo American.

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