Essar Energy Plc rejected a possible buyout bid from its majority shareholder, saying the offer of about £900 million undervalued the London-listed oil and gas company.
The decision comes as a shot in the arm for minority shareholders such asHenderson Global and Standard Life, who were vocal about their displeasure and had termed the offer from Essar Global Fund Ltd. (EGFL) as opportunistic.
Essar said last week that EGFL had made a possible offer of 70 pence per share for the 22% stake it does not already own in the company.
India’s billionaire Ruia brothers—Ravi and Shashi Ruia—are founders of the privately owned Essar Group whose interests span energy, telecom, steel and shipping. They are also ‘beneficiaries’ of EGFL.
Ravi Ruia and his nephew Prashant Ruia are board members for Essar Energy.
An independent committee set up by the company to assess the offer said the current proposal from EGFL did not take into account the company’s long-term growth prospects.
“The independent committee is fully committed to safeguarding the interests of minority shareholders,” Philip Aiken, chairman of the committee, said in a statement on Monday.