New Delhi, July 14: Rupert Murdoch-owned News Corp today announced a 20 per cent open offer for the shareholders of Hughes Software Services (HSS) at a price of Rs 232 per share.
Hughes Software is a subsidiary of US-based Hughes Electronics, which was spun off from General Motors in April before News Corp acquired a 34 per cent stake in it under a $ 6.6-billion deal.
The HSS open offer, which was made a day before the company’s board was due to meet to consider the first quarter results for the period ended June 30, is at an 8.75 per cent discount to the prevailing market price.
Dalal Street, however, did not react to the news. The scrip closed at Rs 252.30 today on BSE marginally lower than Friday’s closing of Rs 252.50.
Market mavens say the pricing seemed to indicate that News Corp was not really serious about the open offer which was just being made to comply with the new guidelines on takeovers framed by the Securities and Exchange Board of India (Sebi).
Hughes Networks System, which is a subsidiary of Hughes Electronics, holds almost 56 per cent in the Rs 220-crore Hughes Software Services.
It is unlikely that shareholders will bite News Corp’s bait. But if they do, the Rupert Murdoch company could raise its stake to 76 per cent in HSS.
The News Corp offer, which opens on August 20 and closes on September 18, is not conditional on any level of acceptance by the shareholders.
Spokesperson for HSS refused comment on the offer.
“As part of the process (takeover of Hughes Electronics by News Corp), all the subsidiaries need to take clearance from their respective areas of operations,” said a senior HSS executive in India.
News Corp has been keen on the take over of Hughes Electronics because it owns DirecTV, the largest satellite television provider in the US. The deal to acquire Hughes Electronics gives News Corp access to DirecTV’s more than 11 million subscribers and concludes Murdoch’s three-year effort to gain a US outlet for his global satellite television network.
Analysts, however, said News Corp did not appear to have any interest in technology solutions providers like HSS elsewhere, raising questions about the kind of fit that the firm would have within the News Corp matrix.