Essar Energy row: Ruia family's proposal rejected

City investors expressed their anger at Ruia family plans to take the Indian oil refiner private following a disastrous four-year spell as a public company

The independent directors of London-listed Indian oil refiner Essar Energy showed some steel today as they “unanimously” rejected the controlling Ruia family’s controversial lowball bid to buy back the rest of the firm.

The Ruias’ Essar Global vehicle has bid just 70p a share for the 22 per cent of the business in the hands of minority investors, valuing the firm at £900 million.

The move comes less than four years after a 432p a share float which has been a disaster for the rest of the City. The billionaire brothers - Ravi and Shashi - are founders of the Essar Group whose interests encompass energy, telecoms, steel and shipping.

The independent committee assessing the bid for the owner of the Stanlow refinery - including industry veteran Philip Aiken, National Grid’s  Steve Lucas and one-time Glencore chairman Simon Murray - today dismissed the Ruia approach.

Aiken said: “The independent committee is unanimous in concluding that the current proposal from Essar Global clearly undervalues the company and its long-term growth prospects.  The independent committee is fully committed to safeguarding the interests of minority shareholders.”

The committee has also drafted in another adviser to consider the bid - boutique investment bank Greenhill - alongside present adviser JPMorgan Cazenove. JPMorgan is Essar’s house broker and also spearheaded the original 2010 float with Deutsche Bank.

The decision to draft in Greenhill follows Association of British Insurers guidance that non-executive directors “should seek separate, independent advice” on a potential takeover.