MphasiS share price rose over 6 percent intraday on April 26 after private equity firm Blackstone commits up to $2.8 billion to acquire a controlling stake in the company.
Blackstone said funds managed by it have entered into definitive agreements to acquire a majority stake in Mphasis, and the transaction will trigger an open offer for the acquisition of up to 26 percent stake.
A wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA), UC Investments (Office of the Chief Investment Officer of The Regents, University of California) and others will co-invest along with Blackstone, a statement said.
The sale is expected to complete in the coming months, subject to customary closing conditions and regulatory approvals.
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 (approximately USD 2-2.8 billion), the statement said.
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Mphasis in a regulatory filing said that "BCP Topco IX Pte Ltd along with Blackstone Capital Partners Asia NQ LP and Blackstone Capital Partners (CYM) VIII AIV – F LP... have announced an open offer for the acquisition of up to 49,263,203 fully paid-up equity shares... from the public shareholders of Mphasis Ltd, representing 26 per cent of the Expanded Voting Share Capital, at a price of Rs 1,677.16 per equity share."
This aggregates to a total consideration of Rs 8,262.23 crore, as per the filing.
The expanded voting share capital refers to the total voting equity share capital of the target company on a fully diluted basis expected as of the 10th working day from the closure of the tendering period for the open offer.
There will be an additional 59,500 employee stock options that will be vested between the date of the public announcement and August 31, 2021, it added.
A different fund managed by Blackstone had acquired a controlling stake in Mphasis from Hewlett Packard Enterprise in September 2016, it added.
At the end of the March 2021 quarter, Marble II Pte Ltd, a fund managed by Blackstone, held a 56.03 per cent stake in Mphasis.
At 12:33 hrs, MphasiS was quoting at Rs 1,753.95, up Rs 57.45, or 3.39 percent.
The share touched a 52-week high of Rs 1,837.45 and a 52-week low of Rs 661 on 12 April, 2021 and 24 April, 2020, respectively.
Currently, it is trading 4.4 percent below its 52-week high and 165.75 percent above its 52-week low.