The Hindu : Digital Global EGM results in two days

Online edition of India's National Newspaper
Thursday, Jan 08, 2004

Business

Business

Digital Global EGM results in two days

By Our Staff Reporter

BANGALORE JAN. 7. Digital GlobalSoft (DGS) held its extraordinary general meeting here on Wednesday amid some acrimonious scenes, even as it is de-listing from the National Stock Exchange may soon be a fait accompli. Some of the retail shareholders who attended the EGM, decided to show they were unhappy with the whole deal.

On November 30 last, DGS announced that Hewlett Packard, (HP), U.S. headquartered multinational IT company which held a controlling stake in it through its subsidiary Compaq UK, had "requested DGS to convene an extraordinary board meeting to consider de-listing of its public float.'' The results of the EGM would be known in two days.

However, with institutional investors, who hold some 30 per cent of the public float, said to be in favour of HP's plans, HP may be able to garner enough shares (70 per cent) to de-list DGS in full compliance with the norms set by the Securities and Exchange Board of India.

HP planned to spend Rs. 1,000 crores to buy some 1.64 crore publicly held shares of DGS. The company was offering a price "in the region of Rs. 750 per share,'' a 50 per cent premium on the present floor rate on the NSE, Mr. Hans Lidforss, a company official had said.

Of the 1.64 crore shares, 37,000 retail shareholders held about 70 per cent and various institutions the rest. A "reverse book-build process'' would be initiated, to allow shareholders of DGS to tender their shares at a price "at or above the floor price — the average price over 26 week to the announcement of the acquisition,'' a company release had said in November last. HP however reserved the right to not buy the shares if the final price as established by the de-listing procedure was more than Rs. 750, a company release said. A minimum of 70 per cent of the public shares would have to be tendered for the de-listing to go ahead.

HP's 50.6 per cent stake in DGS was through Compaq Computer Holdings Ltd., which HP acquired in May 2002.

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