13th Jun 2006 07:01
Vedanta Resources PLC13 June 2006 13 June 2006 VEDANTA RESOURCES PLC ANNOUNCES ACQUISITION OF STERLITE GOLD LTD Vedanta Resources plc ("Vedanta") announced today that it has entered into anagreement to acquire a controlling interest in Sterlite Gold Ltd. (TSX: SGD)("Sterlite Gold"), and that it plans to make a cash offer to acquire, directlyor indirectly, all of the outstanding common shares of Sterlite Gold. Vedanta announces its intention to make a full cash offer for Sterlite Gold, agold mining company listed on the Toronto Stock Exchange ("TSX"), for a totalconsideration of C$68.45 million (the "Sterlite Gold Offer"), representing aprice of C$0.258 per Sterlite Gold common share. As part of this transaction,Vedanta has entered into an agreement to acquire the entire issued share capitalof Twin Star International Limited ("TSI"), the holder of 55.0% of SterliteGold's common shares, for C$37.68 million in cash (the "TSI Acquisition"),representing an imputed price of C$0.258 per underlying Sterlite Gold commonshare. Sterlite Gold's principal assets are located in Armenia and include an open pitgold mine at Zod and a gold processing plant at Ararat. In October 2004,Sterlite Gold announced measured and indicated resources estimated at 2.1million ounces. Vedanta believes that the acquisition offers an attractive lowrisk exposure to this commodity and provides the opportunity to deploy itsproven project development skills. Vedanta believes Zod has the potential to bea world class mine, with existing development potential in addition toexploration upside. The acquisition will also provide Vedanta with the expertiseto take advantage of other gold opportunities, particularly in India. The board of directors of Sterlite Gold appointed a committee of independentdirectors (the "Sterlite Gold Independent Committee") to review the terms of theproposed Sterlite Gold Offer. The Sterlite Gold Independent Committee retainedPricewaterhouseCoopers ("PwC") to prepare a valuation of the Sterlite Goldcommon shares in compliance with Canadian securities laws, including OntarioSecurities Commission Rule 61-501 ("Rule 61-501"). PwC has advised the board ofdirectors of Sterlite Gold and the Sterlite Gold Independent Committee that theoffer price is within its valuation range of C$0.24 to C$0.275 per share. Theboard of directors of Sterlite Gold, on the recommendation of the Sterlite GoldIndependent Committee, has unanimously approved the Sterlite Gold Offer and hasagreed to recommend that shareholders of Sterlite Gold tender their commonshares to the Sterlite Gold Offer. The Sterlite Gold Offer will be subject to customary conditions including allregulatory approvals having been obtained and acceptance by (i) at least 662/3%of the total number of issued and outstanding Sterlite Gold common shares, and(ii) not less than a majority of the total number of issued and outstandingSterlite Gold common shares, excluding any common shares that may not beincluded as part of the minority approval of a second step transaction. Furtherdetails will be contained in the takeover bid circular to be mailed to SterliteGold common shareholders, which will also include a copy of the PwC valuation. Vedanta and Sterlite Gold are under common control. Volcan Investments Limited("Volcan") owns 53.76% of the ordinary shares of Vedanta and 100% of the sharesof TSI, the controlling shareholder of Sterlite Gold. The transactionscomprising the TSI Acquisition and the Sterlite Gold Offer therefore constitutea related party transaction under the Listing Rules of the UK Listing Authorityand an insider bid under Canadian securities laws, including Rule 61-501.Vedanta formed a special committee of directors who are independent of Volcan toconsider and supervise the making of the TSI Acquisition and Sterlite GoldOffer. Vedanta has been advised by HSBC plc, Blake, Cassels & Graydon LLP, Ernst &Young LLP and SRK. Ernst & Young LLP has provided Vedanta with writtenconfirmation that the terms of the TSI Acquisition and Sterlite Gold Offer arefair and reasonable as far as the shareholders of Vedanta are concerned. "We are excited by this unique growth opportunity and believe the acquisitionwhile creating value for our shareholders will contribute significantly to theArmenian economy." said Mr. Kuldip Kaura, Chief Executive Officer, Vedanta. "Itwill position us well to pursue other gold opportunities including those inIndia." For further information, please contact: Sumanth Cidambi [email protected] Director - Investor Relations Tel: +44 20 7659 4732 / +91 22 6646 1531Vedanta Resources plc Faeth BirchRobin WalkerFinsbury Tel: +44 20 7251 3801 About Vedanta Resources plc Vedanta Resources plc is a London listed diversified metals and mining group.Its principal operations are located throughout India, with further operationsin Zambia and Australia. The major metals produced are aluminium, copper, zincand lead. For further information, please visit www.vedantaresources.com. Disclaimer This press release contains "forward-looking statements" - that is, statementsrelated to future, not past, events. In this context, forward-looking statementsoften address our expected future business and financial performance, and oftencontain words such as "expects," "anticipates," "intends," "plans," "believes,""seeks," "should" or "will." Forward-looking statements by their nature addressmatters that are, to different degrees, uncertain. For us, uncertainties arisefrom the behaviour of financial and metals markets including the London MetalExchange, fluctuations in interest and or exchange rates and metal prices; fromfuture integration of acquired businesses; and from numerous other matters ofnational, regional and global scale, including those of a political, economic,business, competitive or regulatory nature. These uncertainties may cause ouractual future results to be materially different that those expressed in ourforward-looking statements. We do not undertake to update our forward-lookingstatements. 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