Mastek ends 5% higher as Cover-All shareholders to take a call on merger with Mejesco

NEW DELHI: Mastek Ltd shares rallied about 5 per cent in intraday trade on Monday on reports that the shareholders of the New Jersey-based Cover-All Technologies will consider a possible merger with Majesco - the US subsidiary of Mastek today.

The stock ended the day 4.96 per cent higher or Rs 7.20 at Rs 152.3.

If Majesco succeeds in getting the approval, the combined entity will become a formidable player in the US mid-tier property and casualty (P&C) insurance market.

The stock was upgraded by brokerages a year ago, soon after it announced the insurance business would be listed separately. Since then, the stock has doubled, ET reported.

Cover-All was acquired by Majesco in December 2014 in an all-stock deal. Majesco India holds 69.7% in Majesco US, while Cover-All holds 16.5% following the acquisition deal. Majesco India is fully-owned by Mastek, added the ET report.

Since the acquisition, Mastek shares have gone up by 65%, with investors betting on a future merger that they believed would unlock value and generate synergies.