Minority investors in Essar Energy, operating UK’s second-biggest oil refinery, have appealed to the Indian and British governments to intervene to prevent a forced takeover by its majority owner at a price they claim undervalues the company.

Listed in London, 78 per cent stakes in the Essar Energy is held by the Essar Group. The Ruia family controlled Indian conglomerate has offered 70 pence per share for the 22 per cent of Essar Energy it does not own.

Other Essar Energy shareholders and independent directors say the figure is too low -- but because the majority owner controls more than 75 per cent of the shares it is in a position to push through the delisting.

Robert Hingley, director of investment affairs at the Association of British Insurers (ABI), wrote to India’s High Commissioner in London Ranjan Mathai and British business minister Vince Cable regarding the issue on April 23.

Copies of Hingley’s letters were released to the media today.

In his letter, Hingley said the forced delisting of Essar Energy would cause “real damage to the integrity of the UK market and to the reputation of Indian companies more generally.”

The minority shareholders have also hired US law firm Skadden Arps to advise them.

Essar Energy’s business interests span power and oil sectors in India. It operates Britain’s second-biggest oil refinery, Stanlow, in northwest England.

The ABI’s intervention comes after the findings of an independent committee of directors of Essar Energy on an offer that said it “materially undervalues Essar Energy and its future prospects.”

Standard Life Investments, a top-five shareholder, has described the bid as “cynical opportunism.”

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