Shares of Mphasis jumped over 6 per cent in intra-day trade on Monday after private equity (PE) firm Blackstone Group said it will buy a majority stake in the company for a consideration of $2.8 billion. A wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), UC Investments and other long-term investors will be co-investing along with Blackstone.
Following the development, the shares of IT outsourcing services provider touched a high of Rs 1,805 on the BSE. At 1.55 pm, the scrip pared gains and was trading 2.50 per cent higher at Rs 1,740.25 as against a rise of 1.20 per cent in the S&P BSE Sensex.
Blackstone had bought around 61 per cent stake in Mphasis from Hewlett Packard Enterprise in 2016 in a deal worth up to $1.1 billion.
This latest transaction will trigger a mandatory open offer for the purchase of up to 26 per cent additional shares of the company from the public shareholders and the acquiring entity has released a public announcement to the stock exchanges.
Based on the open offer subscription, the blended purchase price will vary between Rs 1,452 to Rs 1,497 per share (12-16 per cent premium to 12-month average price and 3-6 per cent discount to 6-month average price) and the purchase consideration will vary between Rs 15,200 crore to Rs 21,000 crore (or, approximately $2.0 billion to $2.8 billion). READ HERE
“We are gratified to continue our partnership with Blackstone, both as a leading investor as well as our client. We believe Blackstone’s sustained strategic partnership will help the company accelerate its growth and scale new heights. Sovereign and pension funds co-investing is a testimony of long-term commitment and a vote of confidence of a marquee set of shareholders,” said Nitin Rakesh, CEO and executive director of Mphasis.
Mphasis shares have surged nearly four times in value since April 2016, when Blackstone bought the initial stake, a Reuters report said.
The sale is expected to conclude in the coming months, subject to customary closing conditions and regulatory approvals.
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