April 9, 2012 / 12:57 PM / 6 years ago

IGate accepts Patni delisting offer

(Reuters) - IGate Corp IGTE.O said it accepted minority shareholders’ offer of 520 rupees ($10.18) per share to delist its Indian unit Patni Computer Systems PTNI.NS PTI.N at a price higher than what it paid to buy a controlling stake in the company.

IGate, a maker of outsourcing software, bought a controlling stake in Patni for 503 rupees per share last year.

Last month, Reuters reported that Patni’s minority shareholders were trying to get a better price and investors were betting that iGate will yield to shareholder pressure.

Patni’s minority shareholders were invited to submit bids via an offer that opened on March 28 and closed two days later.

“We believe that the price of 520 rupees provides both a reasonable premium to the Patni public shareholders and is still accretive to iGATE shareholders while being strategic to the company,” iGate Chief Executive Phaneesh Murthy said in a statement.

Fremont, California-based iGate was trying to buy the 19 percent it does not already own for a lower price. The deal last year valued Patni at $1.2 billion.

In March, iGate, which has a market value of nearly $1 billion, said it had raised a $215 million loan to buy the stake, indicating that it would only pay up to 450 rupees per share for the remaining Patni stake.

iGate said it has now raised a debt of $265 million to fund the share purchase.

Hedge fund Elliott Management Corp, an activist shareholder, owns an 11 percent stake in Patni.

Reporting by Supantha Mukherjee in Bangalore; Editing by Maju Samuel

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