HCL Tech is expected to acquire a 38% stake from Geometric's principal shareholders - the Godrej family and CEO Manu Parpia, according to the newspaper.
HCL Technologies Ltd. has emerged as the front-runner to acquire Geometric Ltd in a deal valuing the mumbai-based IT company at about US$200 million, reports a national daily.
HCL Tech is expected to acquire a 38% stake from Geometric's principal shareholders - the Godrej family and CEO Manu Parpia, according to the newspaper.
HCL Tech is also expected to merge Geometric with itself, according to the daily.
The deal is in the final stage and a formal announcement is likely to made shortly, says the paper.
Godrej holds 31.23% stake in Geometric through Godrej & Boyce Manufacturing Company Ltd and Godrej Investments, while Parpia & his family owns 7.23%.
Geometric started as part of the Godrej Group in 1984 but was later spun off into an independent company a decade later, reports the daily.
Mumbai-based independent investor Rakesh Jhunjhunwala and his wife, who together own 19% in Geometric, are likely to pare their stake in separate open market transactions, reports the paper.
In March last year, the Godrej family and Parpia had appointed JM Financial to sell their 39% stake in the engineering solutions company.
Tech Mahindra, Capgemini, HCL Tech, GlobalLogic and L&T Infotech were among the potential buyers for the acquisition, according to media reports.
With the backing of the Jhunjhunwalas, HCL could mop up over 57% shares of Geometric followed by a mandatory open offer to buy up to 26% from the public shareholders.
SEBI rules limit promoter shareholding in listed companies to 75% unless the acquirer is keen on delisting the company.
Geometric reported revenues of US$181.40 million for the financial year 2014-15 and employs 4,800 people across the world.
Geometric shares are up ~5% at Rs 160.20 on NSE while HCL Tech shares are up ~1% at Rs. 842.
Stock Commentary:
HCL Technologies Ltd is currently trading at Rs. 841.55, up by Rs. 9.55 or 1.15% from its previous closing of Rs. 832 on the BSE. The scrip opened at Rs. 837 and has touched a high and low of Rs. 847 and Rs. 830.4 respectively. So far 417309(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 117315.3 crore.
Geometric Ltd is currently trading at Rs. 159, up by Rs. 6.7 or 4.4% from its previous closing of Rs. 152.3 on the BSE. The scrip opened at Rs. 162 and has touched a high and low of Rs. 167.95 and Rs. 157.8 respectively. So far 646087(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 990.41 crore.
HCL Tech is expected to acquire a 38% stake from Geometric's principal shareholders - the Godrej family and CEO Manu Parpia, according to the newspaper.
HCL Tech is also expected to merge Geometric with itself, according to the daily.
The deal is in the final stage and a formal announcement is likely to made shortly, says the paper.
Godrej holds 31.23% stake in Geometric through Godrej & Boyce Manufacturing Company Ltd and Godrej Investments, while Parpia & his family owns 7.23%.
Geometric started as part of the Godrej Group in 1984 but was later spun off into an independent company a decade later, reports the daily.
Mumbai-based independent investor Rakesh Jhunjhunwala and his wife, who together own 19% in Geometric, are likely to pare their stake in separate open market transactions, reports the paper.
In March last year, the Godrej family and Parpia had appointed JM Financial to sell their 39% stake in the engineering solutions company.
Tech Mahindra, Capgemini, HCL Tech, GlobalLogic and L&T Infotech were among the potential buyers for the acquisition, according to media reports.
With the backing of the Jhunjhunwalas, HCL could mop up over 57% shares of Geometric followed by a mandatory open offer to buy up to 26% from the public shareholders.
SEBI rules limit promoter shareholding in listed companies to 75% unless the acquirer is keen on delisting the company.
Geometric reported revenues of US$181.40 million for the financial year 2014-15 and employs 4,800 people across the world.
Geometric shares are up ~5% at Rs 160.20 on NSE while HCL Tech shares are up ~1% at Rs. 842.
Stock Commentary:
HCL Technologies Ltd is currently trading at Rs. 841.55, up by Rs. 9.55 or 1.15% from its previous closing of Rs. 832 on the BSE. The scrip opened at Rs. 837 and has touched a high and low of Rs. 847 and Rs. 830.4 respectively. So far 417309(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 117315.3 crore.
Geometric Ltd is currently trading at Rs. 159, up by Rs. 6.7 or 4.4% from its previous closing of Rs. 152.3 on the BSE. The scrip opened at Rs. 162 and has touched a high and low of Rs. 167.95 and Rs. 157.8 respectively. So far 646087(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 990.41 crore.
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