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Profit Opportunities from Vedanta and Cairn India Merger

Author

Listed:
  • Pitabas Mohanty

    (XLRI Jamshedpur, India)

  • Supriti Mishra

    (IMI Bhubaneswar, India)

Abstract

On June 14, 2015, Vedanta Resources PLC of the UK announced the merger of two of its Indian subsidiaries, namely, Vedanta Limited and Cairn India Limited. Per the terms of the merger, Vedanta Limited would issue one share of itself for every share of Cairn India. In addition, it would also issue a preference share of INR 10 in face value. The stock prices of the two companies, however, soon started trading outside the range suggested by the above exchange ratio. This gave rise to different possible trading strategies for the investors with different possible outcomes. The case is written around mid-September 2015, when the share prices of both companies declined and the shareholders were yet to receive any formal communication from the management.

Suggested Citation

  • Pitabas Mohanty & Supriti Mishra, 2019. "Profit Opportunities from Vedanta and Cairn India Merger," Asian Case Research Journal (ACRJ), World Scientific Publishing Co. Pte. Ltd., vol. 23(01), pages 65-89, June.
    • Handle: RePEc:wsi:acrjxx:v:23:y:2019:i:01:n:s0218927519500032
    DOI: 10.1142/S0218927519500032
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