Mumbai, April 12: Citigroup plans to acquire the Indian shareholding in e-Serve International, a company of which it already owns 44 per cent, in a reverse book-built issue estimated to be worth Rs 550 crore.
The acquisition comes at a time when the campaign against outsourcing has intensified in the US, where Citigroup is based. e-Serve handles the bank’s myriad back-office jobs and is likely to get more work.
Citigroup has offered Rs 800 apiece to those who sell their shares, which bounced from Rs 630 on Friday to near Rs 800 after report of the planned stake acquisition came in. The scrip opened at Rs 725 and closed at Rs 782.40 on BSE. The price Citigroup is ready to pay is a 27 per cent premium on the share’s last close, an analyst said.
“Shareholders of e-Serve may tender their shares to Citibank Overseas Investment Corporation at a price at or above the floor price determined by the Sebi guideline,” the foreign bank said in an official statement.
The floor price is defined as the average price of a share quoted on the National Stock Exchange in the 26 weeks preceding the date of the public announcement issued in accordance with the Sebi delisting regulations.
e-Serve offers business process outsourcing services to Citigroup companies in more than 25 countries. Set up in 1992, the firm was one of the earliest in the business to take advantage of costs and emerge as one of the top five outsourcing firms in the country.
Last week, IBM snapped up Daksh, a leading outsourcing firm ranked as the third-largest technical and customer support services firm, in a Rs 750-crore deal.
“Citibank Overseas Investment Corporation believes that a price of Rs 800 per share presents a compelling opportunity for e-Serve’s highest shareholders,” the statement said. Investors are not happy with the price, and feel Citigroup could be more generous.
Citigroup said e-Serve could be delisted if the public shareholding drops below 25 per cent after the deal.