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Vedanta Limited: Delisting of Shares
內容大綱
On May 12, 2020, Vedanta Resources Limited, representing the London, United Kingdom company Vedanta Group, expressed its intention to buy all public shares of its Indian subsidiary Vedanta Limited and to delist it from all stock exchanges in India and New York. The chair of Vedanta Group explained that the decision to delist was largely driven by a strategy to simplify the group structure. The indicative offer price of ₹87.5 per equity share represented a premium of 9.9 per cent over the closing market price of ₹79.6 on the previous day. However, there was some doubt that minority shareholders would find the offer attractive. The final exit price, which would be determined through the reverse book-building process, was likely to increase. Exactly what amount Vedanta Resources Limited was willing to pay was a key factor in the quest for a successful delisting. Two other important considerations were the additional amount of borrowing required and future debt servicing constraints.
學習目標
This case is best suited for graduate-level courses focusing on corporate restructuring and investment banking. The case helps students understand the motivation behind delisting of shares and the process of determining an exit share price. The case discusses the need and focus of regulations to protect the interests of public shareholders as well as the role of boards of directors when companies are being delisted. Preparations for delisting by public shareholders and promoters are also explained. After working through the case and assignment questions, students will be able to do the following:<ul><li>Identify reasons behind delisting of shares.</li><li>Explain the focus of delisting regulations.</li><li>Describe the role of the board of directors when the company is being delisted.</li><li>Identify the factors that affect the final exit price of a company’s stock and its impact on the acquirer.</li></ul>