Essar Energy rejected a 1.5-billion dollar takeover bid by the Ruia brothers on 25 February 2014. The rejection followed the findings of an Independent Committee headed by Phillip Aiken.
The Committee found that the offer undervalued the company and will not cater the rights of the minority shareholders.
The offer by the Ruia brothers was 70 pence a share which was one-sixth of its 2010 floating price. Committee claimed that such a offer price will undervalue the company and its future prospects.
Ruias-owned Essar Global Fund Limited (EGFL), which owns a majority 78% stake in Essar Energy. The Ruias brothers proposed to make an offer to buy the remaining 22% stake in the company for 70 pence a share on 14 February 2014.
Essar Energy then appointed an independent committee of the board to take a call on the proposed offer on behalf of the minority shareholders.
The independent committee concluded that the current proposal from EGFL clearly undervalued the company and its long-term growth prospects.
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