India’s biggest producer of copper and zinc, Vedanta Resources Plc., offered $388 million (around Rs1,598 crore) to buy an additional 20% of Sesa Goa Ltd four months after it took control of the iron ore company.
The so-called open offer, mandated by local law, will start 31 August and close 19 September, Sesa said in a statement to the Bombay Stock Exchange.
Vedanta, based in London, had agreed in April to buy Mitsui & Co.’s 51% stake in Sesa for $981 million.
Metals and mining firms including Arcelor Mittal are trying to expand iron ore production in India to feed rising demand for the raw material that’s used to make steel. Vedanta beat rivals, including Arcelor Mittal and Aditya Birla Group’s Essel Mining & Industries Ltd, to secure Sesa—the country’s largest non-state iron ore exporter.
Vedanta and two of its units will buy a maximum of 7.87 million Sesa shares for Rs2,036 each, the same price it paid for Mitsui’s stock. Buying the 20% will cost Vedanta about Rs1,600 crore.
Sesa Goa, based in Panaji, rose as much as 4% to Rs1,947 in Mumbai trading, before closing at Rs1,926.65 on Wednesday. This was an increase of 2.86% from the previous day’s closing price.
Under Indian law, a firm buying more than 20%of another firm must make an open offer to acquire an additional 20% of its shares. The open offer for Sesa Goa, which had been scheduled to begin 21 June, missed the timetable because of procedural delays, Vedanta had said on 15 June. bloomberg