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Mphasis – De-listing Premium Likely to Return in Stock Valuations

May 14, 2008

If HP’s acquisition of EDS goes through, in our view it is likely to lead to an open offer for minority shareholders of Mphasis (~61% owned by EDS). We believe it makes sense for combined entity to take Mphasis (27,000 emp) private and fully merge it with offshore arm of HPQ (est. ~30,000 emp).

What happened in the Digital Globalsoft[Digital Equipment India Ltd] case – Post merger with Compaq, HP had merged HP-ISO with Digital Globalsoft (majority owned by Compaq) and then de-listed it. HP had made an open offer of Rs750 per share (at ~50% premium to floor open offer price) and finally de-listed at Rs850 per share.

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