Shares in the controversial FTSE 100 miner Eurasian Natural Resources (ENRC) dropped yesterday after it confirmed details of an unwanted attempted takeover bid by its oligarch founders and the Kazakhstan government.
The independent directors of the miner were forced to reveal the details after they rapidly leaked into the market on Friday afternoon, shortly after the bid approach had been made public.
The latest twist in the ENRC saga, which has already seen its chief executive resign and an investigation by the Serious Fraud Office, saw the Takeover Panel intervene yesterday to say that rival miner Kazakhmys is now deemed to part of the bidding party because the Kazakhstan government is using its shareholding in the company as part of its offer.
The complexity of the takeover is building the pressure on UK regulators to tighten up the rules that have allowed massive foreign resources companies to float on the London stock market leaving outside investors with burnt fingers. ENRC floated at 540p in late 2007. Yesterday’s indicated takeover offer is worth 255p, made up of 175p in cash and 80p worth of Kazakhmys shares.
The independent directors once again rejected it as “materially” undervaluing the business, and ENRC shares dropped 7.5p to 264.1p.
The Financial Conduct Authority will publish new rules in the summer tightening the eligibility of certain types of company to be included in FTSE indices.
MPs on the Business Select Committee will this week call for directors of ENRC and fellow controversial miner Bumi to appear before them to explain their London listings.