Cairn triggers $3.5bn share buyback offer for investors
CAIRN Energy yesterday kicked off its share buyback scheme made possible by the sale of 40 per cent of its Indian operations to Vedanta.
Shareholders were offered the chance to sell their stock at a premium or to pocket a bumper dividend and retain them.
The company said that more than 64 per cent had opted for the dividend option, which has been pegged at £1.60. That represents 906.5m shares. A total of 489.1m shares were sold for cash.
The $3.5bn (£2.2bn) share buyback comes after the company sold a slice of Cairn India to Vedanta for $4.1bn.
Morgan Stanley is acting as the company’s broker for the buyback.
Some of the money is being used for further exploration in areas including Greenland.
The oil explorer last month dropped plans to award chairman and founder Sir Bill Gammell share options worth £2.5m, bowing to pressure from investors.
The board had wanted to reward Gammell, a former Scottish international rugby player who in 1980 founded what is now a FTSE 100 company, for helping pull off the sale to Vedanta. Some institutional investors torpedoed the payout.