The first meeting of an independent committee of Essar Energy’s board took place on Monday. The company confirmed it had on Sunday evening received an outline proposal from Essar Global Fund Ltd (EGFL) for the takeover of the remaining 22 per cent of the company it does not already own.

The committee is tasked with examining EGFL’s offer of 70 pence a share, and 80 pence for the company’s convertible bonds announced on Friday. The offer price is a small premium to Friday’s closing price of 66 pence a share, but was swiftly criticised by one of the company’s largest minority shareholders, Standard Life Investments, as “cynical opportunism,” and a “calculated attempt to deprive minority shareholders of substantial future upside in Essar Energy’s valuation”.

The independent committee is set to hold a series of meetings and is chaired by Philip Aiken, chair of engineering company Areva, and member of the board since 2010.

Other members include Simon Murray, the former Chairman of miner Xstrata, Sattar Hajee Abdoula, the head of Grant Thornton in Mauritius, Subhas C Lallah, a senior counsel in Mauritius, and Steve Lucas, the former finance director of Britain’s National Grid.

“Our focus and that of the independent committee is to look after and maximise the interests of shareholders,” said a spokesperson for Essar Energy on Monday.

Under the UK rules, EGFL now has 28 days from Friday to make a firm offer.

Among the issues that will have to be considered by the board is a forthcoming March 4 deadline by which time Essar Energy will have to comply with recent rules set by the FTSE Group, part of the London Stock Exchange, to have at least a 25 per cent free float. If it does not comply it would be removed from the FTSE indices, which would force many institutional investors to sell their holding.

Back in November, EGFL had announced its plans to conduct a private sale to meet the new regulatory requirements by raising the free float from 22 per cent to 25 per cent, is yet to do so.

The surprise announcement by Essar Energy on Friday followed the publication of the company’s third quarter results, which though mixed received a positive reaction from analysts.

“A number of factors including recently granted permission to clear forest for its Mahan coal block in Madhya Pradesh, and the dollarisation of its debts, could drive EBITDA in 2016 up by a further 20 per cent,” said analysts at Bank of America Merrill Lynch on February 11.

“We see a good buying opportunity at the currently depressed valuation for exposure to significant optionality.”

Shares of Essar Energy rose nearly 3 per cent in Monday morning trading in London.

Over the weekend, the company was lambasted in the British press, with the Sunday Times describing Essar Energy’s 2010 listing in London, as “one of the most disastrous London stock market floatations of recent years” and warned that the latest developments would hurt the reputation of the London market.

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