Listed information and technology conglomerate IPVG Corp. has not given up its bid to acquire PeopleSupport Inc. as it increased its all-cash takeover offer for the NASDAQ-listed firm to $17 per share from only $15 each share.
The move is in line with the group’s strategic acquisition roadmap in growing and taking its BPO (business process outsourcing) business to greater heights.
Based in Los Angeles, PeopleSupport operates more than 8,000 call center seats, with the majority located in the Philippines. 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.
In a disclosure report filed at the Philippine Stock Exchange, IPVG said the revised takeover offer represents a 34.81 percent premium to PeopleSupport’s 60-day weighted average closing price of $12.61 per share and is 13.33 percent higher than the earlier offer of $15 a share which was at a premium of only seven percent at that time.
IPVG, which aims to become one of the top BPO companies in the region by 2009, partnered anew with regional investment house AO Capital Partners Ltd. to acquire majority of PeopleSupport. AO Capital has been an active advisor to IPVG since its inception.
Enrique Gonzalez earlier said: “Similar to other target firms in the pipeline, we see PeopleSupport as a good acquisition given its scale, position in the marketplace and heavy concentration in the Philippines.We believe IPVG can add significant value to the operation given our fully integrated presence in the Philippines.”
Gonzalez said he believes that the group’s revised proposal is a compelling opportunity for the company and its shareholders after its $355 million offer had been rejected by PeopleSupport for being “inadequate” and for failing to take into account the US-based call center firm’s strategic value and success in implementing its growth strategy.
“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,” he said.
PeopleSupport has confirmed it received Friday a revised takeover bid from IPVG and AO Capital. While the bid was unsolicited, PeopleSupport said it will evaluate 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 People Support.
IPVG said it was “unfortunate that the board of directors of PeopleSupport has not engaged us in the serious discussions despite repeated attempts to have confidential dialogues regarding our proposal.”
Funding for the acquisition of PeopleSupport will come from debt and equity from internal and third parties.
IPVG expects the Philippine BPO market to grow to $11 billion with over 500,000 seats by 2010 from $2.1 billion and 200,000 seats in 2006.
Aside from the Philipines, IPVG has BPO operations in Singapore, Vietnam, Hong Kong and India. IPVG also has interests in telecommunications and online gaming.
IPVG owns IP-Contact Center Outsourcing Inc. (IPCCO), which provides support on the aspects of local talent pool and facilities to enable PCCW Teleservices to extend its contact center and telecommunications solutions in the Philippines to service North American clients.
IPCCO had also acquired the assets of Global Stride, a contact center operation located in IBM Plaza, Eastwood City, Libis, earlier this year.