Pressure had built on Vedanta Resources in recent months in London, particularly following the killing of protesters in police firing in Thoothukudi in May. Britains opposition Labour party called for the company to be delisted from the London Stock exchange to "remove its cloak of respectability".
In a statement the independent committee of Vedantas board and Volcan, said they had agreed in principle on the key terms of a possible cash offer for the remaining share capital of Vedanta. The independent committee is set to recommend the offer to independent shareholders, and if accepted, the firms delisting could follow within 20 business days of that time.
The offer of £8.25 a share is a near 28 per cent premium on the closing price of Vedanta Resources on Friday last week. Investors would also receive the 41 US cents per share dividend for the year ending in March. Volcan currently owns 66.53 per cent of Vedantas total share capital. Shares of Vedanta Resources were up 26 per cent in early afternoon trading in London.
If the move was successful, Vedanta would make an application to delist its shares from the London Stock Exchange (LSE) and from the Financial Conduct Authoritys list. The delisting could take place 20 business days after Volcan had received acceptances of its firm offer, or acquired majority of shares from independent shareholders.
"The London listing has served us extremely well. However, given the subsequent growth of our underlying businesses and the maturity of the Indian capital markets, together with related feedback from our shareholders and other stakeholders, we have concluded that a separate London listing is no longer necessary to achieve the Vedanta Groups strategic objectives," chairman, Vedanta Resources, Anil Agarwal said in a statement.
The company has in the past faced concerns from some investors such as the Church of England, which in 2010 sold its stake in the company, citing its "respect for human rights and local communities".
In a statement released by Vedanta, it has stated that Sterlite Copper has filed an appeal before the National Green Tribunal, challenging the orders of the Tamilnadu government.
"Sterlite Copper has filed an Appeal before the NGT, New Delhi, challenging the Orders passed by the Tamilnadu Pollution Control Board directing closure of its Copper Smelter unit at Thoothukudi, in the State. The company has also sought NGTs permission to allow it to carry out care and maintenance of the plant and other interim reliefs, during the pendency of Appeal," the statement read.