Essar Global Fund Ltd. (EGFL) has offered 70 pence per share for the 22 percent of Essar Energy it does not own. Other Essar Energy shareholders and independent directors say the figure is too low.
Robert Hingley, Director of Investment Affairs at the Association of British Insurers, said shareholders fear being forced into an "unacceptable choice" of either accepting the offer or being stuck in an unlisted company burdened with the debt used to finance the buyout.
Hingley told Reuters that minority shareholders have formed a "special committee" representing about a third of the outstanding free float and have written to Essar Global asking it to only de-list Essar Energy if half the minority shareholders accept the offer.
"If more than half of them vote with their feet, then fair enough," he said.
The shareholders have also hired U.S. law firm Skadden Arps to advise them.
EGFL and Essar Energy declined to comment on Friday.
Essar Energy owns power and oil assets in India and operates the UK's second-biggest oil refinery, Stanlow, in northwest England.
Since it listed in London nearly four years ago, the company has faced a string of problems, including slow growth in its Indian operations, delays in getting coal licences, a tough tax regime in India and a fall in margins at Stanlow.
The problems have eroded Essar Energy stock's value significantly from its listing price of 420 pence in 2010.