Daily BriefsEvent-Driven

Event-Driven: Vedanta Ltd and more

In today’s briefing:

  • Vedanta Delisting Proposal/Offer Fails (We Think)

Vedanta Delisting Proposal/Offer Fails (We Think)

By Travis Lundy

Late Saturday night Vedanta Ltd (VEDL IN) released an announcement to the BSE and NSE that the biggest Delisting Offer in Indian history had failed. 

Regulation 19 (1) of the Delisting Regulations noted above is that either they did not get enough shares, or the Promoter got enough shares and rejected the price. In this case, as the next page of the announcement shows, they did not get enough shares. The required number of shares to reach 90% to trigger a Discovered Price was 1.341bn but the number of confirmed bid shares submitted was 1.2547bn shares. An additional 123.19mm shares had been submitted, taking the total to 1.378bn, which would have passed the hurdle, but those shares were not confirmed by bankers and custodians before the deadline. 

It was reported that the bankers DAM Capital and JP Morgan were seeking to extend the Delisting Offer for an extra day because of both the BSE outage Friday and the matter of some brokers only allowing bids at the Floor Price (reported Thursday). The BSE had already extended the hours of the Delisting Offer to 7pm Indian Standard Time, and this was seen to be helping. Apparently the bankers were not successful at the time. 

This will likely cause an unwind. This will hurt the price.

But wait…

An article put out by PTI (Press Trust of India) and syndicated across severalnewspapers has a quote saying…

Sources privy to the development said Vedanta is now exploring with regulatory authorities if the reverse book building period could be extended by one day.

There is still a chance, and while I thought VEDR should have had the extra day, I do not know that SEBI will give them the extra day now that the result has been announced. I would be surprised if they get the extra day.

More about the size of the unwind, the “fair” price vs comps, and possible mitigants below the fold.

Insights previously published in the timeline of the Vedanta Delisting Offer are listed below.

Relevant Insights To Date

Date Theme or Ticker Insight Title
2019 Indian M&A Guide Quiddity India M&A Guide 2019 
24 May 2020 Delisting Offers Indian Delisting/Exit Offers – Know Your Process and The Games Played 
19 Jun 2020 Failed Exit Offers Failed Exit Offers in India: Lessons for VEDL, ADANI, and HEXW? 
27 May 2020 Vedanta Ltd  Vedanta Delisting Offer – How It Goes From Here 
22 Jun 2020 Vedanta Ltd  Vedanta Delisting Offer: Opportunities and Timing 
25 Jun 2020 Vedanta Ltd  Vedanta Buyout Loan = HUGE Hindustan Zinc Div But May Change Vedanta RBB Timing 
14 Jul 2020 Vedanta Ltd  Putting Sightlines on the Vedanta Discovered Price 
18 Aug 2020 Vedanta Ltd  Putting Sightlines on the Vedanta Delisting Offer TIMING 
7 Sep 2020 Vedanta Ltd  Vedanta: Reaching The End Game 
17 Sep 2020 Vedanta Ltd  Vedanta : More Fuel For The Fire 
21 Sep 2020 Vedanta Ltd  Vedanta (VEDL): Cash Raised, Money Flow, and How It Affects Discovered Price 
29 Sep 2020 Vedanta Ltd  Vedanta Reverse Book Build Auction – It’s On And the Schedule From Here Is Tight 
4 Oct 2020 Vedanta Ltd  Vedanta Limited Reports Results: KEY Info on Deal Funding Embedded 
8 Oct 2020 Vedanta Ltd  Vedanta SellDown – Probably Futures 
9 Oct 2020 Vedanta Ltd  Vedanta – Someone Is Playing Silly Buggers But Even On The Last Day Investor Strategy Matters 

Before it’s here, it’s on Smartkarma