The Hindu Business Line : Oracle to make open offer for 20 pc in i-flex

Mr Rajesh Hukku (left), Chairman and Managing Director, i-flex Solutions, with Mr Deepak Ghaisas, CFO, at a news conference in Mumbai on Monday. - Paul Noronha

Mumbai , Aug 14

Oracle will make an open offer for an additional 20 per cent stake in i-flex Solutions in which it already has majority ownership. The open offer, if fully subscribed to, may see Oracle's equity stake in i-flex, currently at 52.5 per cent, go up to 75 per cent.

Meanwhile, i-flex has announced that it would be acquiring US-based Mantas, a provider of anti-money laundering and compliance software and services, for $122.6 million.

Mantas reported revenues of $35 million last fiscal and profits of $6.9 million.

i-flex said that the risk and compliance market is estimated at $20 billion by 2008.

It expects to grow Mantas's revenues by 20 per cent annually, said Mr Rajesh Hukku, Chairman & Managing Director, at a news conference on Monday.

"This is one of our largest acquisitions. It significantly strengthens our position in the risk and compliance segment."

The open offer is mandatory consequent to i-flex Solutions deciding to make preferential allotment of 4.447 million shares to Oracle Global (Mauritius) to finance the acquisition of Mantas. At Rs 1,307.50 per share, this allotment will see Oracle investing $125 million (over Rs 581 crore) in i-flex and its stake in the Indian company go up from 52.5 per cent to 55.1 per cent, triggering open offer requirements. The floor price for the preferential allotment is established by the SEBI formula for preferential allotment as of the reference date of August 13, 2006, said a statement from Oracle.

The mandatory open offer for additional 20 per cent stake in i-flex will be made at Rs 1,475 per share, again based on the SEBI formula for minimum price for such an offer.

DSP Merrill Lynch will be the manager to the open offer.

The preferential allotment price is less than the current price of i-flex shares while the open offer price is higher.

On Monday, the i-flex scrip closed at Rs 1,380.5 on the BSE, up 4.46 per cent over the previous close.

Oracle had bought over 42.41 per cent equity stake in i-flex from Citigroup for $593 million (nearly Rs 2,700 crore) last year.

The open offer that followed raised its stake in i-flex only marginally. As on March 31, 2006, Oracle's stake in i-flex was 47.74 per cent.

Between then and now, Oracle's stake went up further, through open market purchases, to 52.5 per cent.

More Stories on : Open Offers | Mergers & Acquisitions | Software | Economic Offences

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