April 11 A buyout offer from India's billionaire
Ruia family for Essar Energy Plc "materially
undervalued" the company and its prospects, an independent
committee set up to examine the offer said for a third time.
Essar Global Fund Ltd (EGFL), which owns about 78 percent of
the resources company, on Friday stuck to its offer of 70 pence
per share made on March 14, which was immediately slammed by the
committee at the time.
Essar Energy shares were about 2 percent at 66.65 pence at
1223 GMT on the London Stock Exchange on Friday.
EGFL, in which brothers Shashi and Ravi Ruia are
beneficiaries, said on Friday that Essar Energy's shareholders
and bondholders had till May 9 to accept the offer.
The offer would become unconditional if 90 percent of shares
outstanding are tendered in its favour. However, EGFL can change
the acceptance level at its discretion.
The independent committee on Friday urged shareholders to
take no action in relation to the offer and said it would make
its views clear by no later than April 25.
Essar Energy owns a series of power and oil assets in India
and also operates UK's second-biggest oil refinery, Stanlow, in
Since it listed in London nearly four years ago, the company
has faced a string of problems, including slow growth in its
Indian operations, delays in getting coal licences, a tough tax
regime in India and a fall in margins at Stanlow.
The problems have eroded Essar Energy stock's value
significantly from its listing price of 420 pence in 2010.
EGFL, which made the offer through its subsidiary Energy
Bidco Holdings Ltd, had also proposed to acquire the Essar
Energy-guaranteed 4.25 percent convertible bonds due 2016.
Ravi Ruia also sits on Essar Energy's board along with his
nephew Prashant Ruia. Brothers Shashi and Ravi, whose interests
span energy, telecoms, steel and shipping, had a combined net
worth of about $4.9 billion as of March, according to Forbes.
Two of the London-listed company's minority shareholders,
Standard Life and Henderson Global, have previously called
EGFL's offer opportunistic.
Essar Energy's independent committee is being advised by
Greenhill and JPMorgan Cazenove.
(Reporting by Karen Rebelo in Bangalore; Editing by Savio