(Corrects to remove "takeover situation" from paragraph 6 and
add to paragraph 7)
April 25 A bid for London-listed Essar Energy
Plc by its majority shareholder materially undervalues
the company and should be rejected, an independent committee set
up to examine the offer reiterated on Friday.
The committee, appointed by the company in February, also
said proposed changes to UK listing rules could make it more
difficult to delist the company. (r.reuters.com/fev78v)
Essar Global Fund Ltd (EGFL), which owns about 77 percent of
the India-focused resources company, had last month offered 70
pence per share for the stake it does not already own.
Essar Global declined to comment on the circular on Friday.
UK's financial watchdog said last week that it was
considering amending rules to give smaller shareholders a bigger
say when majority shareholders move to delist companies.
Under the proposed rules, a controlling shareholder would
require at least 75 percent of voting rights along with majority
acceptances from minority shareholders to delist a company.
However, these conditions will not apply in a takeover
situation if the majority shareholder has more than 80 percent
of voting rights.
If the rules are passed by the regulator, which is expected
to review the matter on May 1, EGFL will only require an
additional 3.28 percent of voting shares to declare the offer
unconditional, the committee said.
A group of minority investors led by the Association of
British Insurers (ABI) hired U.S. law firm Skadden Arps earlier
this month to block the deal.
"We call upon the majority shareholder to undertake only to
apply for a delisting if more than half of outstanding shares
are assented to the offer," Robert Hingley, director of
investment affairs at ABI, said in an email on Friday.
The independent committee is being advised by J.P. Morgan
Cazenove and Greenhill & Co.
(Reporting by Karen Rebelo in Bangalore; Editing by Saumyadeb