Vedanta-Cairn deal unattractive for minority shareholders: Hemindra Hazari

In a chat with ET Now, market expert Hemindra Hazari shares his view on Vedanta-Cairn India merger deal.

ET Now: What is your sense? Would you see the 1:1 swap ratio? Will it excite the minority shareholders?

Hemindra Hazari: I really do not think so. I am not in favour of the merger right from the beginning. I do not like companies going in for diversification because as an investor, you would pick up companies as they are. You do not want managements to come up with diversification process.

Therefore, I would rather pick up a pure metals play or a pure oil and gas play. The whole reason for this merger is really to tap into the cash reserves of Cairn India. That is the only synergy that I see. Now the rest of the synergy, it does not make sense to me as an investor.

From a minority shareholder, they had to give some soothing balm. The preference share appears to be the case.

I can understand Hindustan Zinc’s merger with Vedanta. But what synergy an oil and gas company has with a mineral mining company is beyond me? Therefore, I do not see what the future lies for Cairn shareholders. Even I do not see a revival in oil & gas and metals sectors soon. I really do not see what is there for the minority shareholders of Cairn.