A bid for London-listed Essar Energy Plc by its majority shareholder materially undervalues the company and should be rejected, an independent committee set up to examine the offer reiterated on Friday.
The committee, appointed by the company in February, also said proposed changes to UK listing rules could make it more difficult to delist the company.
Essar Global Fund Ltd (EGFL), which owns about 77 percent of the India-focused resources company, had last month offered 70 pence per share for the stake it does not already own.
Essar Global declined to comment on the circular on Friday.
UK's financial watchdog said last week that it was considering amending rules to give smaller shareholders a bigger say when majority shareholders move to delist companies.
Under the proposed rules, a controlling shareholder in a takeover situation would require at least 75 percent of voting rights along with majority acceptances from minority shareholders to delist a company.
However, these conditions will not apply if the majority shareholder has more than 80 percent of voting rights.
If the rules are passed by the regulator, which is expected to review the matter on May 1, EGFL will only require an additional 3.28 percent of voting shares to declare the offer unconditional, the committee said.
A group of minority investors led by the Association of British Insurers (ABI) hired U.S. law firm Skadden Arps earlier this month to block the deal.
"We call upon the majority shareholder to undertake only to apply for a delisting if more than half of outstanding shares are assented to the offer," Robert Hingley, director of investment affairs at ABI, said in an email on Friday.
The independent committee is being advised by J.P. Morgan Cazenove and Greenhill & Co.