< is back in sell-out buzz. A London-based pure play BPO giant Xchanging is making a bid to acquire the Indian IT solutions provider in a deal valued at $250 million, The Economic Times has reported. The offer has reportedly been made at Rs 82 per share to Cambridge promoters, which seems to be much lower than Carlyle’s bid for the BPO last year. The bid values the company at Rs 913 crore ($230-250 million).

The report adds that a set of promoters - which includes the NRI Chanderia family, former Pepsico chairman Chris Sinclair and Cambridge vice-chairman Satyan Pately - are backing the offer.

These three promoters together hold 30 per cent stake in the company. Ramesh Vangal, the largest individual shareholder and ex-McKinsey CEO Rajat Gupta reportedly feel that the bid undervalues the company, according to ET report.

Vangal faction feels that Xchanging’s offer price discounts the company’s ‘intrinsic’ value. Entrepreneur-investor Vangal is one of the co-founders and owns an 18 per cent stake in Cambridge. The report also says that Vangal may be exploring the possibility of structuring a counter offer in the next few weeks, and has not taken a decision on Xchanging’s offer. Together all the promoters hold 60 per cent which is jointly held in a Mauritius entity, Scandent Holdings Mauritius Ltd.

Last year Carlyle and Vangal had jointly bid to buy out Cambridge and valued the company at around $400 million. They were offering around Rs 140 per share, which much higher than the current bid at Rs 82 per share. They had pipped other bidders like EDS, Apollo (private equity firm) and HCL, who were also in the race. The deal did not take place because there was no consensus among all the promoters on price.

Xchanging has a market capitalization of more than $1 billion and net income of $63 million. It is the leading business services provider within the insurance sector. Previously, the company has acquired U.K.-based insurance technology services firm RebusIS for around $75 million. It also has a 10 per cent stake in Italian financial software vendor CAD IT. Last year it also bought out BAE Systems’ 50 per cent stake in the jointly owned company, Xchanging HR Services, a business established in 2001.

Vangal, along with Rajat Gupta and others, set up Scandent Solutions, a broad-based IT services company, more than six years back. Scandent bought Cambridge Integrated Services, a global outsourcing firm and part of US-based Aon Corporation, for $125 million in 2004.

One year later, Scandent Solutions merged with Cambridge Services to form Cambridge Solutions. Scandent Solutions also received an investment of $30 million from Indopark Holdings Limited, a wholly owned subsidiary of Merrill Lynch.

Cambridge employs 4,600 people, with around 2,000 people in the US. Cambridge reported Rs 1,267 crore revenues in FY08 with Rs 8.79 crore loss. Almost two-thirds of Cambridge’s revenue comes from high-end BPO operations spread across the US, India and Europe. It has a strong presence in lucrative insurance processing domain and this might be reason for Xchanging offer. The share price of Cambridge rose by 5 per cent to Rs 60 at opening of markets today. Cambridge Solutions also signed a 10-year service contract worth Rs 433.9 crore with Aon Ltd and Xchanging in 2006.

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