Vedanta rises, Cairn India drops as investors give thumbs-up to merger

UPDATE: SHARES OF CAIRN INDIA HAVE DROPPED HALF A PERCENT AS ON 1236 HOURS.

The shares of mining and energy groups, Vedanta Ltd and Cairn India surged by 2% on Wednesday morning after the companies got shareholders nod for their merger.

At 1007 hours the shares of Vedanta Ltd was trading at Rs 178.35 per piece, up 2.44%, or Rs 4.25 on BSE.

At the same time, the shares of Cairn India was trading at Rs 206.45 per piece, up 1.67%, or Rs 3.40 on BSE.

On Tuesday, the Vedanta Resources PLC, cleared the deck with majority of shareholders approving the merger of group companies Vedanta Ltd and Cairn India.

It said in the statement,"Vedanta Resources plc announces that at its General Meeting held today, Tuesday 6 September, the resolution put to shareholders in relation to the proposed merger of Vedanta Limited and Cairn India Limited (the "Merger") was duly passed on a poll."

The group received 225,984,316 votes favouring the merger, while a small group of 1,174 vote against it. 

The deal was first announce on 14 June 2015. 

As we had reported, on July 22, both the companies had revised the terms and conditions of the deal considering the prevailing equity market conditions that time.

Vedanta Ltd had said in a regulatory filing that each Cairn India minority shareholder will get one equity share in the company and four redeemable preference shares with a face value of Rs 10, with a coupon of 7.5% and tenure of 18 months from issuance. 

In order to attract shareholders, minority shareholder will be implied to a premium of 20% to one month Volume-Weighted Average Price (VWAP) of Cairn India share price.

In the yesterday's regulatory filing, the company said that the Jurisdictional High Courts have convened the shareholder meetings for each of Vedanta Ltd and Cairn India on 8 September 2016 and 12 September 2016, respectively. The Notice convening the shareholder meetings will be sent to shareholders in due course.