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Our Bureau

To realise close to Rs 1,150 cr from sale of 34.73 pc holding

Bangalore June 2

Baring India Investment Ltd has sold its entire stake of 34.73 per cent in IT services and BPO firm Mphasis BFL Ltd on Friday to EDS through the open offer.

Baring, which was the largest shareholder in the Mphasis BFL prior to this sale, will realise close to Rs 1,150 crore by selling over 5.6 crore shares that it held in the IT firm. This sale would imply the complete exit of Baring from Mphasis, subject to the successful completion of the open offer.

Baring had entered Mphasis way back in June 1998 and had made an unsuccessful attempt to exit the IT firm in May-August last year. The deal then was said to have fallen through on the pricing front, with the Hindujas and Temasek being the final front-runners in the bidding process.

open offer

Subsequently, EDS came out with an open offer early this year to acquire 52 per cent stake in Mphasis. The EDS' offer at Rs 204.5 per share opened on May 17 and will close on June 5. Citigroup Global Markets India Pvt Ltd acting on behalf of TH Holdings along with EDS advanced the open offer schedule recently.

The offer will be contingent upon EDS acquiring 83 million shares, representing approximately 52 per cent of current shares outstanding. If at least 83 million shares are not tendered in the offer, EDS will not accept any shares tendered.

Mphasis shares closed lower by less than a per cent on Friday at Rs 189.50 after touching an intra-day high of Rs 192.25.

Recently, the MphasiS BFL's Chairman and Managing Director, Mr Jaithirth Rao, offered to sell 18.75 lakh shares to EDS through the open offer. With his offer, Mr Rao's holding in Mphasis would get reduced to 2.8 per cent from the current 3.97 per cent. Mr Rao would be richer by Rs 38 crore if the entire 18.75 lakh shares that he has tendered in the open offer are accepted.

With Baring and Mr Jerry Rao's offer to sell their stake, EDS would need another 16 per cent of Mphasis' equity for the offer to sail through. It is expected that more institutional investors would offload their holdings in Mphasis through the open offer in view of the bear grip in the stock markets.

More Stories on : Outsourcing | Open Offers | Mergers & Acquisitions

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