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Billionaire Anil Agarwal said in July that he planned to offer about $ 1 billion for the acquisition of Vedanta Resources Plc, listed in London. private, a movement that revived speculation its ultimate goal is an agreement with Anglo American minor
. The Volcan family trust of Agarwal has until July 30 to make a firm offer or withdraw from the deal, which would leave Vedanta in India alone.
In March 2017, Mr. Agarwal began taking a stake in Anglo American He announced that he was buying a second tranche in September 2017.
In total, Mr. Agarwal has 19.35%, making it the largest shareholder of Anglo American, but only for three years unless it acts to buy the stock or seek to refinance the arrangement, which is actually a loan.
Agarwal always said that the stake was an investment, based on his belief in Anglo as a society, for his family trust.
He said that it was unrelated to Vedanta and that he was not planning a takeover.
However, he did not hide his desire to make Vedanta a major diversified player or his involvement in South Africa.
Vedanta's international operations are copper mines in Zambia and Vedanta Zinc with operations in South Africa and Namibia.
Mr. Agarwal stated that he wanted to buy back the 30% stake of the Indian government in Hindustan Zinc, which he holds majority control. Anglo declined to comment on reports that he has rebuffed previous approaches for a rapprochement with Hindustan Zinc.
Why radiation?
Vedanta was the first Indian company to register in London in 2003. It raised about 500 million pounds ($ 657 million), which gave it a market capitalization of Just over 1 billion pounds
Since then, the market capitalization has almost doubled to 2 billion pounds sterling. Vedanta publicly traded with a market capitalization of 11.66 billion dollars. It also has significant debt levels and is eclipsed by Anglo, with a market capitalization of around 24 billion pounds.
The London write-off simplifies the Vedanta structure, potentially making it more attractive as a company, but the loss of listing would reduce Mr. Agarwal's trading capacity as potential buyers would prefer London stock to Indian stocks, according to analysts. Mr. Agarwal said that he did not give interviews.
In his announcement of the planned cancellation, MR. Agarwal cited "the maturity of Indian capital markets," saying that an entry in London was no longer necessary.
Mark Cutifani, CEO of Anglo American, said that Mr. Agarwal was "a very favorable shareholder"
the conversation is consistent with the conversation with all of our other shareholders, "he said. said when Agarwal was questioned about the company's tentative results on Thursday.
What do shareholders think?
At least one major investor said that he was unhappy with the price that Mr. Agarwal offered to buy back other shareholders.
Anglo's shareholders benefited from the participation of Mr. Agarwal, who helped raise the shares, but some investors for whom ESG's Problems (environmental, social and governance) are worrisome: the antecedents of Vedanta would be disturbing.
The largest shareholder is the South Africa Public Investment Corporation, which was the largest shareholder. in American Anglo until the purchase of Mr. Agarwal.
Deon Botha, director of PIC business, said that he could not comment because "public statements to this effect will constitute market-sensitive information."
a commitment to ESG issues that could put him at odds with Vedanta. Others say that PIC's quest for a national champion based on the separation of Anglo's South African assets could persuade him to work with him.
Is Vedanta's ESG record worse than any other?
Anglo, had problems with leaks and deaths, the problems of Vedanta attracted a particular criticism.
In India, the Tamil Nadu government ordered the permanent closure of a copper smelter in Vedanta and cut off its power supply in May following violent protests as police opened fire on protesters . Vedanta seeks to reverse the decision. He is also fighting a judgment of the London High Court related to the alleged pollution of copper operations in Zambia.
Implications of the New CEO:
At the end of August, Srinivasan Venkatakrishnan, known as Venkat, took the helm of Vedanta after resigning his position as CEO of AngloGold Ashanti. Prior to becoming Managing Director in 2013, he was Chief Financial Officer of AngloGold, while Mark Cutifani, CEO of Anglo American since 2017, was the CEO of AngloGold. Analysts say the two worked well together.
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