Financial Daily from THE HINDU group of publications
Monday, Dec 01, 2003
Financial Daily from THE HINDU group of publications Monday, Dec 01, 2003 |
|
|
|
|
|
Home Page
-
Buyback Info-Tech - Buyback HP plans buyback in Digital, to delist — Indicative price Rs 750 per sahre Our Bureau
Bangalore , Nov. 30 HEWLETT-PACKARD (HP), a 50.6 per cent stake owner in software services vendor Digital GlobalSoft Ltd, has proposed to buy back stakes held by local minority shareholders and subsequently delist Digital from the bourses. The share buyback will be through a reverse book-building exercise and HP has quoted Rs 750 as an indicative buyback price. HP expects to commit close to Rs 1,000 crore to benefit Digital GlobalSoft shareholders. The buyback would make Digital a 100 per cent subsidiary of HP. The other software development operations of HP in India would be merged with the entity "in line with the global delivery structure", Mr Hans Lidforss, Vice-President of Strategy and Corporate Development, HP, said from London. Digital would call an extraordinary general meeting by mid-January and the delisting procedure would start soon after, following necessary approvals. Currently, close to 35,000 shareholders own 16.4 million Digital stocks of which institutional holdings could be in the range of 27-30 per cent. Complete ownership was "the best option to consolidate and enhance operational efficiency" of HP units in India, Mr Lidforss said. Post-buyback, Mr Som Mittal, the current Digital Managing Director, would continue to head the software services unit for HP's Indian offshore delivery model, he added. HP is yet to select the second-tier management for the consolidated unit, he said. HP's Indian software unit currently employs close to 5,000 while Digital's headcount stands at 4,600. "Implementation of this proposal would allow us to further improve the integration of our Indian operations with each other and into our global delivery platform, while offering an attractive exit opportunity to public shareholders," Mr Lidforss said. The indicative buyback price of Rs 750 translates close to 50 per cent premium over the average weekly high and lows of the closing prices of Digital's shares on the National Stock Exchange over the last 26 weeks. In June this year, Digital GlobalSoft said it was merging HP Services India Software Organisation through a share swap. Digital's board approved the transfer of the HPS ISO division in exchange for 278 lakh shares and 767 lakh convertible preference shares. The preference shares will be converted into 767 lakh equity shares 18 months from the date of allotment. Thus, HP's stake in Digital would have initially increased to 73.2 per cent and subsequently to 76.2 per cent. Compaq Computer Holdings was acquired by Hewlett- Packard in May 2002 merger with Compaq Computer Corporation.
Article E-Mail :: Comment :: Syndication
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |
Copyright © 2003, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|