BS reported that Vedanta has cleared a major roadblock in his USD 9.6 billion takeover of Cairn India as the market regulator SEBI gave its green signal to the deal.

The Securities and Exchange Board of India’s clearance to Vedanta’s open offer for Cairn shareholders comes nearly seven months after the offer document was filed. The open offer, announced on August 17 last year, will be made at INR 355 per share.

The deal, however, is yet to get the government’s approval on account of differences over who will bear the royalty burden on production from Cairn’s Rajasthan block. At present, ONGC, a 30% partner in the block, bears the burden. It wants this to be shared. The dispute has reached the Cabinet.

In August 2010, Vedanta agreed to buy 51% in Cairn India in what was till then the biggest deal in India’s oil and gas space.

Any deal involving acquisition of 15% or more in a listed company requires the acquirer to make an open offer for buying 20% stake from public shareholders. This offer has to be approved by SEBI.

The open offer price is less than what Vedanta has agreed to pay Cairn (INR 405 per share), which includes a non-compete fee of INR 50 per share. The INR 13,631 crore open offer was first scheduled to open on October 11 and close on October 30.

Vedanta will now have to announce a fresh schedule for the open offer which will be finalized within a fortnight. Enam and JM Financial are managing the offer.

(Sourced from BS)