Listed information technology and gaming conglomerate IPVG Corp. has increased its all-cash takeover offer for Nasdaq-listed PeopleSupport Inc. to $17 per share from $15 as it continues to seek a bigger slice of the global business process outsourcing market.
In a disclosure to the Philippine Stock Exchange, IPVG said the revised offer represents a 34.81 percent premium to PeopleSupport’s 60-day weighted average closing price of $12.61 per share.
IPVG has teamed up anew with Hong Kong-based AO Capital Partners Ltd. for the bid to acquire PeopleSupport.
“We believe that our new proposal represents a substantial premium to the stated weighted average closing price and is a compelling opportunity for the company and its shareholders. We believe that the board of directors of the company has a serious fiduciary duty to consider what is best for the interest of the company’s shareholders, both short-term and long-term,” IPVG chief executive Enrique Gonzalez and AO Capital managing director Martin Lichauco said in their joint letter to PeopleSupport.
PeopleSupport, a leading offshore BPO provider, had thumbed down late last year IPVG’s earlier offer of $355 million or $15 million a share after finding it “inadequate.” At that time, the bid for PeopleSupport was a premium of about seven percent.
PeopleSupport confirmed Friday it received a revised takeover bid from IPVG and AO Capital.
Los-Angeles based PeopleSupport said the revised bid was unsolicited, but it will review and consider the proposal.
IPVG and AO Capital said the increased takeover offer followed a careful deliberation of the recent initiatives, revised earnings guidance and new strategic planning of PeopleSupport.
“We understand that the company felt that with the conclusion of its strategic planning session and its recent initiatives under our offer last November 30, 2007 to acquire the company at a purchase price of $15 per share was “inadequate and was not the best way to enhance shareholder value,” Enrique and Lichauco said
IPVG said it “unfortunate that the board of directors of PeopleSupport has not engaged us in serious discussions despite repeated attempts to have confidential dialogues regarding our proposal.”
PeopleSupport chairman Lance Rosenzweig said IPVG’s earlier offer failed to take into account the US-based firm’s strategic value and success in implementing its growth strategy.
The takeover bid was in line with IPVG’s goal to become one of the top business process outsourcing companies in the Asia Pacific region by 2009.
With a total manpower of 9,000 worldwide, PeopleSupport serves clients in a variety of industries such as travel, consumer, financial services, healthcare, insurance, technology, telecommunications, entertainment and education.
IPVG said funding for the acquisition of PeopleSupport will come from a combination of debt and equity. IPVG has BPO operations in the Philippines, Singapore, Vietnam, Hong Kong and India. IPVG has interests in telecommunications and online gaming.
AO Capital, in the other hand, is member company of American Orient Capital Partners Group which provides high value-added advisory services for the private placement of debt and equity capital, corporate restructuring, mergers and acqusition and project finance. It is also involved in managing private equity funds for investments in Asian-based companies.