LONDON / MUMBAI: Shares of Vedanta Resources, led by NRI billionaire Anil Agarwal, fell 5.59 per cent on the London Stock Exchange on Friday amid speculation that it could acquire a majority stake in Cairn Energy’s Indian branch.
In the last afternoon session, the LSE traded down 5.50 percent at .6 20.61. Vedanta opened on a positive note, but soon turned red.
The broader market was also weak and the benchmark FTSE 100 was trading at 5,248.95, down 0.32 percent in the last afternoon session.
Cairn Energy plc, on the other hand, rose 1.41 percent and was quoted at 5 4.59 on the LSE.
In India too, Vedanta Group firm Starlight Industries sank more than 4 per cent at Rs 160.70 on the Bombay Stock Exchange. Starlight was the biggest loser in the Sensex pack today.
In contrast, the Indian branch of Cairn Energy Plc, Cairn India, rose 5 per cent to a maximum of Rs 358 on the BSE. The scrip rose 4.36 percent to close at 355.45.
Vedanta Resources plc is in talks to acquire a 51 per cent stake in Cairn India for about US 8-8.5 billion (approximately Rs 40,000 crore) and a deal could be announced on Sunday evening or Monday.
Scottish Explorer Cairn Energy plc, which holds 62.37 per cent stake in India-listed Cairn India, is seeking a premium of up to 20 per cent for a regulatory partnership, two people familiar with the development said.
Agarwal is meeting with Bill Gammel, chief executive of Cairn Energy Plc in London today, and the deal could be announced on Sunday evening or Monday, one of them said.
The deal will be subject to official approval, as Cairn has clear or pre-emptive provisions to seek pre-approval before transferring interest on three oil and gas producing resources, including vast areas of Rajasthan and seven exploration blocks. The first refusal is on any shares sold to partners such as ONGC.