Essar Global offers 70p per share for remaining 22% stake in Essar Energy

Essar Global offers 70p per share for remaining 22% stake in Essar Energy

Essar Global Fund Ltd has made a possible offer of 70 pence per share for the remaining 22 per cent stake in its British subsidiary Essar Energy Plc that it doesn't own.

The proposal, which represents a modest premium to Essar Energy's Thursday share close of 60 pence on the London Stock Exchange (LSE), values the London-listed oil & energy firm at more than 900 million pounds.

Last Friday, Essar Global said that it could make a bid to acquire the remaining stake in Essar Energy on its own or as part of a consortium.

Essar Energy has constituted an independent committee to consider the offer. Chaired by Philip Aiken, the committee has Sattar Hajee Abdoula, Simon Murray, Subhas C Lallah, and Steve Lucas as its members. The company stressed that each of the members was free from conflicts of interest with regard to the offer.

However, minority stakeholder Standard Life has condemned Essar Global's offer, arguing that the bid would deprive small shareholders of the firm's future growth value. David Cumming, chief of equities at Standard Life Investments, said, "This potential bid is an example of cynical opportunism and should not be allowed to proceed."

Capital World Investors, the firm's second-largest shareholder, said it could not reveal if it planned to partake in a bid.

Essar Global's latest move is a U-turn from its earlier plan to sell some of its shares to decrease its stake in Essar energy to meet UK listing requirements. Currently, Essar Global owns 78.02 per cent stake in Essar Energy.

Tagged with