Feb 17 Shares in Essar Energy Plc, controlled by India's billionaire Ruia brothers, rose nearly 3 percent on Monday after it received a possible takeover offer from its largest shareholder worth about 900 million pounds ($1.51 billion).
The proposal from Essar Global Fund included a possible offer of 70 pence per share for the 22 percent stake it does not already own in Essar Energy.
Standard Life, which holds a minority stake in Essar Energy, criticised Essar Global's proposal in a statement on Sunday, saying the bid would deprive small shareholders of the company's future growth value.
Essar Global had said on Friday that it could make an offer on its own or as part of a consortium at a "modest" premium to the company's Thursday share close of 60 pence on the London Stock Exchange.
Essar Energy, which owns a series of power and oil assets in India, also operates UK's second biggest oil refinery - Stanlow in northwest England.
The Indian oil and gas company's stock has been steadily declining since its London listing four years ago at 420 pence.
Adam Forsyth, analyst at Arden Partners Ltd, said: "I think some investors may feel that they would have rather held out. It would be nicer to see the parents maybe give the chance of hoping for an eventual stronger recovery in the share price,"
Essar's shares were up 3 percent at 68 pence by 1213 GMT on the London Stock Exchange on Monday.
Essar Global has also made a possible offer to buy Essar Energy's 4.25 percent convertible bonds due 2016 for 80 pence per share.
Essar Energy declined to comment further on Monday. A spokesman for Capital World Investors - Essar's second-largest shareholder, declined to comment.
Essar Global's latest move is a U-turn from its earlier plans of selling shares to dilute its 78.02 percent stake in Essar Energy so the company could meet UK listing requirements, which mandate that at least 25 percent of a company's stock be available for trading.