London, Feb. 24 (PTI): Essar’s bid to take over its UK unit has been rejected by an independent committee set up by the subsidiary.
The committee was formed to consider the proposal from Essar Energy Plc’s biggest shareholder, the Ruia brothers, and to protect the interests of minority shareholders.
The panel unanimously concluded that despite operational and Indian macro-economic challenges faced by the business, a possible offer price of 70 pence per share undervalues the London-listed oil and gas company.
The committee’s decision is viewed as a victory for minority shareholders, who felt the possible offer from Essar Global Fund Ltd (EGFL) was “opportunistic”.
“The independent committee is unanimous in concluding that the current proposal from EGFL clearly undervalues the company and its long-term growth prospects.
“The independent committee is fully committed to safeguarding the interests of minority shareholders,” Philip Aiken, chairman of the panel, said in a statement today.
The Ruias, whose Essar Global group owns 78 per cent in Essar Energy, had proposed on February 17 of buying the remainder stake. The indicative 70-pence-a-share offer valued Essar Energy at one-sixth its listing price in 2010.
The committee said to supplement the advice it received, Greenhill & Co has been appointed as additional financial adviser to JP Morgan Cazenove and that it was “fully committed to safeguarding” the interests of minority shareholders.