Feb 19 (Reuters) - FTSE on Wednesday said it suspended the deadline for London-listed Essar Energy to meet a minimum free float rule pending the result of a potential offer by Essar Global Fund Ltd to buy out the remaining stake in the company.
The oil and gas conglomerate’s independent committee said that with FTSE’s free float deadline suspension, shareholders such as tracker funds will not be required to sell their holdings prior to the outcome of the bid.
Essar Energy currently has a free float under 25 percent and was therefore subject to FTSE’s requirement to raise it to at least greater than 25 percent by March 4 in order to meet the eligibility requirements to remain in the FTSE UK Index Series.
According to FTSE’s new rules for listing which came into effect in 2012, companies have to maintain a minimum 25 percent from the earlier threshold of 15 percent of shares that can be freely traded to be able to join the FTSE UK index series.
FTSE said Essar Energy’s future eligibility for inclusion in the FTSE UK Index Series will be made after the outcome of the proposed offer is announced.
Essar Global Fund in November said it planned to sell shares to dilute its 78.02 percent stake in Essar Energy so the company could meet UK listing requirements.
However, in a reversal, the fund announced its plan on Friday to buy the remaining 22 percent in the company. On Sunday, it made an offer of 70 pence per share over Thursday’s closing price for Essar Energy, which is controlled by India’s billionaire Ruia brothers.
Minority shareholders Standard Life and Henderson Global Investors criticised the move calling it “cynical opportunism.”