Flex makes open offer for 20% in Hughes Soft

By siliconindia staff writer   |   Tuesday, 15 June 2004, 19:30 IST
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NEW DELHI: Flextronics International has announced an open offer for 20% of the paid-up equity capital of Hughes Software Systems at Rs 548 per share. Flextronics recently acquired a 55% stake in Hughes Software Systems for $226m from the Rupert Mudroch-controlled DirecTV unit, Hughes Network Systems. For the open offer, Flextronics will have to spend Rs 372.3 crore. The offer will open on July 30 and close on August 30. The last date for revising the offer price and number of shares is August 19. It is mandatory for Flextronics to come out with an open offer to the public for acquiring the 20% stake, which is 67,93,810 shares, as per the guidelines of the Securities and Exchange Board of India. Estimated to be one of the largest tech deals, Flextronics’ buy-out of Hughes Software Systems has also been touted as one of the largest cross-border deals in India. Flextronics plans to retain the current management team at HSS and cross-sell to each other’s customer base, Flextronics claims to have become the first electronic manufacturing service provider to offer embedded and application software development for telecom infrastructure products and customers. HSS has also assured that it maintains its sales and profit forecast up to March ’05. The price Flextronics has offered to pay per share for the open offer is slightly higher than average of the weekly high and low of closing prices of HSS shares. These prices were during the 26 weeks preceding the offer, which totalled Rs 547.9. It is also higher than the average of daily high and low of HSS shares during the two weeks preceding the date of offer, which amounts to Rs 511.2.