VCCircle

Finally, Mphasis, a leading applications and business process outsourcing (BPO) services company based in Bangalore, is selling out to EDS. The multinational IT company has announced a conditional open offer to acquire a 42 per cent stake in Mphasis for some $380 million. The offer is at Rs 204.5 (approximately $4.58) a share in cash. This represents an approximate 30-percent premium to the 26-week average price of Mphasis.

The offer will be contingent upon EDS acquiring 83 million shares, representing approximately 52 percent of current shares outstanding. If at least 83 million shares are not tendered in the offer, EDS will not accept any shares tendered . At current exchange rates, total purchase price for the 83 million shares is approximately $380 million. EDS expects this transaction to be completed by early third quarter. “This offer is complementary to our overall strategy to enhance EDS' presence and capabilities in India,” said Mike Jordan, EDS chairman and chief executive officer. Mphasis currently has more than 12,000 employees, including about 11,000 in India. Mphasis serves clients in multiple industries, including financial services, transportation, technology and healthcare. [Via Press release]

MphasiS chairman Jerry Rao to head EDS’ global fin services practice

The Economic Times reports that Jerry Rao erry Rao is expected to head the global financial services practice of EDS. Currently, Jean-Louis Bravard leads EDS’ global financial services. The rationale behind MphasiS’ acquisition is that EDS wants to ramp up its financial services practice to compete with IBM Global Services. EDS has been working on strengthening this practice for the past three years.

Have been in talks with EDS: Baring Pvt Equity

In an interview to Moneycontrol.com, Rahul Bhasin, MD, Baring Private Equity, which holds 34.9 per cent in Mphasis, said that the fund seriously explore the open offer. Their earlier efforts to sell out (based on an auction process) never materialised. I believe they got better offer prices earlier, and the current price of Rs 204.5 seems to be less than what was offered by Temasek or Hinduja TMT in May 2005. (Read this article for more.)