The Telegraph
Since 1st March, 1999
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H-P raises Digital offer price

Mumbai, Jan. 27: Hewlett-Packard today said it will pay Digital-GlobalSoft shareholders Rs 850 apiece, sweetening its initial offer that had been capped at Rs 750.

The move meets demands for a higher offer from Indian shareholders who had long been whining about the proposition.

“Digital Globalsoft has received the formal communication from Hewlett Packard Company (H-P) (the ultimate parent of Compaq Computer Holdings Ltd) following the conclusion of the reverse book building process conducted by the company,” Digital said in a statement sent to stock exchanges this evening.

Reacting to the bigger bait, Digital shares jumped 6 per cent to Rs 843, but retraced part of the rise to close at Rs 829.45.

“The exit price established by the book-building process, in accordance with the guidelines — which centre on the price at which the largest number of shares was tendered — was Rs 850 per share,” the company said.

The acquirer (Hewlett Packard Leiden BV) has announced that it has accepted the exit price, and would acquire all the shares tendered at that threshold level.

Hewlett-Packard Co said on Tuesday it will pay Rs 850 each for shares it does not already own in its Indian arm, Digital GlobalSoft Ltd, increasing the money it would spend on the buyout to Rs 1400 crore ($308 million).

The offer was made by Hewlett-Packard Leiden BV, a subsidiary of the US computer giant, which currently holds a 50.6 per cent stake in the Indian company.

In December, H-P said it would buy the remaining stake at an indicative price of Rs 750 in a process that would end with Digital leaving stock exchanges.

However, stock market rules that were framed last year required the delisting price to be set through a book-building process — which has thrown up a price of Rs 850. Bankers to the offer said they received most bids at Rs 850.

The acquisition of 1.66 crore publicly-held shares in Digital GlobalSoft closed on Friday, with 1.27 crore shares tendered at prices that went up to Rs 1,900.

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