Petrol Stop - Agarwal calls Deora in bid to salvage Cairn buy

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Agarwal calls Deora in bid to salvage Cairn buy

Tuesday, 24 August 2010

24 August 2010;timesofindia.indiatimes.com:NEW DELHI: The battle for Cairn India is turning into an all-out corporate war. On Monday, London-based billionaire Anil Agarwal dashed to Delhi in a bid to advance his Vedanta group's ambitious acquisition effort, even as reports did the rounds of state-owned ONGC, OIL and GAIL coming together to launch a counter-offer. Agarwal is learnt to have called up petroleum minister Murli Deora, following reports that the ministry is reluctant to allow the Vedanta deal to go through. Sources said Deora told Agarwal the ministry has still not received any formal notification from the UK-based Cairn Energy that it wishes to sell its stake in its Indian arm, even though chairman Bill Gammell has been present in Delhi. Sources revealed that in the course of the phone conversation, Agarwal told Deora that Vedanta's offer for Cairn India -- at Rs 405 a share -- was "so fabulous" that it would be difficult for anyone, including a consortium of PSUs, to match. Oil ministry sources conceded that Agarwal might just have a point. Last week, Vedanta had announced an offer worth $9.6 billion for up to 60% in Cairn India, whose most important asset is the oil-rich Mangala field in Rajasthan. The deal, if it comes through, would be the third largest acquisition by an Indian corporate and mark Vedanta's first foray into the energy sector. It could also help make Anil Agarwal the richest Indian in the world, overtaking Mukesh Ambani -- whose Reliance Industries Ltd is also a gigantic presence in India's oil and petroleum sector. However, Agarwal may have to wait a while before kicking off celebrations. ONGC, OIL and GAIL have reportedly already held informal talks and lined up loan commitments of $10 billion from international banks. "Deutsche Bank, Credit Suisse and UBS, the only three leading bankers who are not in conflict with the Vedanta- Cairn Energy deal, may be advising ONGC on the counter-bid," a source said. ONGC will be the leader of the consortium with at least a 50% share. OIL and GAIL will each hold 20-25%. ONGC already has a 30% holding in Cairn India's Rajasthan oil block. Vedanta's deal needs government approval because Cairn India has production-sharing contracts with it for oil and gas exploration.