Tuesday, October 30, 2001
BOTH Hughes Software Systems Ltd and Hughes Tele.com today
decided to convene an extraordinary general meeting to seek
shareholder approval for a possible change in control following
the merger of Hughes Electronics Corporation with EchoStar
Communications Corporation in the US.
Hughes Network has a 56.1 per cent stake in Hughes Software
and a stake of 24.8 per cent in Hughes Tele.com (fixed telephony
services provider in Maharashtra and Goa circles).
In a notice sent to the stock exchanges, Hughes Software
said no minimum public offer is likely to be made "since
there is no agreement or intention to acquire Indian shares
of Hughes Software Systems and since the amalgamation is not
an indirect acquisition of Hughes and since there is no change
in control or agreement to change control."
Hughes.Tele.com has sent a similar notice to the stock exchanges.
Notwithstanding this, the share price of Hughes Software
rose by Rs 37.9 onthe BSE today, in anticipation of a public
offer, to close at Rs 227.45.
"The market feels a public offer is likely if there
is a management change. The previous example of Castrol has
led us to believe this," said Mr Vipul Shah, Head of
Portfolio Advisory Services at Prabudas Lilladhar.
According to him, the company has only one tool by which
it can prevent making an open offer, that is, if its shareholders
agree there is no need for such a move.
This is unlikely, say analysts: "The market feels no
shareholder will vote against this, when on a rough calculation,
the offer price taking the last six months' average works
out to over Rs 540, with the share quoting at Rs 227 today."
The Hughes Tele.com share rose marginally on the BSE, up
by 10 paise, to close at Rs 8.10.
Last updated : February 2, 2004
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