EDS says HP won’t need to make offer for MphasiS

MUMBAI: Shares of IT services firm MphasiS declined nearly 2% on Thursday after the company said Hewlett-Packard will not be required to make a tender offer to its shareholders after the technology giant���s buyout of Electronic Data Systems (EDS). MphasiS is a subsidiary of US-based EDS, which would be acquired by HP for about $13.9 billion. As of March 31, EDS held about 61% stake in the domestic firm.

The scrip of MphasiS closed at Rs 234.25, down 1.95% in the afternoon trade on the Bombay Stock Exchange. It had touched an intra-day low of Rs 229 and over two lakh shares of the company changed hands on the bourse. In a filing on Wednesday, MphasiS quoting a letter from EDS to the company said HP would not be required to make a tender offer to its shareholders.

According to the letter from EDS��� assistant secretary David Hollander, HP would not be required to make a tender offer for the shares of MphasiS under the provisions of the Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Earlier this month, HP announced it would acquire EDS and both the companies had signed a definitive agreement in this regard under which HP would buy EDS at a price of $25 per share.

The transaction is expected to close in the second half of 2008. Pursuant to the deal, HP intends to establish a new business group, to be branded EDS and headquartered at EDS��� existing executive offices in Plano, Texas.