The Hindu Business Line : Few respond to EDS' revised open offer

Reasons cited
The dismal response can be largely due to the offer price of Rs 204.5, which was at a hefty discount to the then prevailing market price
EDS stake in MphasiS post-open offer stands unchanged at a little over 50.1 per cent

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Bangalore March 3

Electronic Data Systems' (EDS) revised open offer to acquire 20 per cent more stake in MphasiS has received dismal response.

The acquirer, TH Holdings along with EDS, managed to pick up only 2,201 shares through the open offer that ended on February 19. The poor response can be largely attributed to the offer price of Rs 204.5, which was at a hefty discount to the then prevailing market price. EDS' revised open offer to acquire over 3.3134 crore shares amounting to around 20 per cent of MphasiS' stake, opened on January 29 and closed on February 19. Its stake in MphasiS post-open offer stands unchanged at a little over 50.1 per cent.

Interestingly, the MphasiS Chairman, Mr Jaithirth Rao, sold over 7.5 lakh shares in the open market during the offer period. According to the stock exchange filings, Mr Rao sold over 7.57 lakh shares in two instances during the period.

The MphasiS stock hit a 52-week high of Rs 329.45 on February 6, the day when Mr Rao sold some six lakh shares. Assuming that Mr Rao sold these shares at a 52-week high price, the MphasiS Chairman would have earned over Rs 19 crore.

Further, Mr Rao sold over 1.57 lakh shares on February 19, the closing day of the open offer, when the stock ended at Rs 304.45. Mr Rao's holding in MphasiS after this sale stands at around 2.34 per cent. Citigroup Global Markets India Pvt Ltd was the manager to the offer.

EDS had initially planned the open offer sometime in October 2006. But it did not go through for some operational reasons. Last year, the company had bought 83 million shares, or a 51.4 per cent majority stake, in MphasiS for nearly $380 million.

Subsequently, EDS announced that it was merging its Indian operations with MphasiS.

The integration is likely to be completed by the first quarter of 2007. For the quarter-ended December 31, 2006, TH Holdings along with EDS owned 51.1 per cent in MphasiS, while Barings India Investments Ltd held 10.07 per cent.