Oracle not to delist i-flex for 5 more yrs

Stung by the lukewarm response to its earlier open offer to buy i-flex shares, US-based Oracle has maintained it has no plans to come out with additional open offers for i-flex shareholders for at least the next five years. In a recent filing with the US Securities and Exchange Commission, however, it added a rider stating it may think of an open offer if the share price is below Rs 2,100 per share — its offer price of December 7, 2006.

Oracle holds 83 per cent of i-flex’s shares and has been consistently trying to acquire the rest in a bid to delist i-flex from the Indian bourses. It would require a little over 90 per cent of shares to do so. The move will help it to integrate i-flex with its business worldwide.

Under current norms, if the minority shareholders do not surrender shares willingly to the new promoter, the Securities and Exchange Board of India’s (Sebi’s) takeover code requires the new promoter to come out with a proposal to buy back the rest of the shares from the minority shareholders under a proposal to delist the company.

The buy-back price is decided on the basis of the market price under the reverse book building process. Reverse book-building requires generating offers from sellers.

However, since its open offers received a tepid response, the US-based firm has reportedly been lobbying the Indian government for over a year to amend the Sebi takeover code. The amendment was aimed at compelling the minority shareholders to surrender the shares of i-flex in favour of Oracle, a government source said.

The amendment was suggested on the lines of the “minority squeeze-out norms” of the US under which minority shareholders of an acquired company are compelled to surrender their shares in favour of the new promoter that has acquired a majority stake. Official sources close to the development said the Indian government did not agree to amend the code.

Read more in The Business Standard article.

I-flex shares surge on Oracle open offer buzz

Shares of i-flex, an IT solutions provider for banking space, today rose by 11 per cent on speculation that Oracle Corporation, which owns over 81 per cent in the firm, might make an open offer to buy more shares.

The i-flex scrip soared to an intra-day high of Rs 2,440, a rise of 10.95 per cent or Rs 241 over its previous close of Rs 2,199.15 as nearly 82,000 shares were traded on the Bombay Stock Exchange.

Oracle, which holds stake in the Indian company through Mauritius-based Oracle Global, had earlier this year acquired 35 per cent stake after sweetening its offer price from Rs 1,475 to Rs 2,100 per share.

With speculation again doing rounds, the i-flex stock rose to closed at Rs 2,425.8, up 10.31 per cent today. This is the company’s second-highest closing after the scrip touched its 52-week high of Rs 2,545 on April 27.

Read more in The Business Standard article.

Construction, banking top FII buy list

Foreign institutional investors (FII) have raised their holding in 540 companies out of top 1,000 companies on the Bombay Stock Exchange (BSE) during September-March (2006-07) period. They have trimmed their holdings in 360 companies, while the remainder have seen no change in foreign holding. Among the top 500 companies, FIIs have reduced their stake in 178 companies.

There is no clear sectoral trend, companies that have gained favour with foreign investors are mostly from construction and banking. Second-line IT companies too were on the FII buy list during the half year under consideration. That view may have changed following the recent appreciation in the rupee, which is likely to hurt the margins of most IT companies, brokers say. Most pharmaceutical companies saw a decline in FII shareholding.

Among the top hundred stocks that saw major decrease in FII holding are Punj Lloyd (5.51 per cent), Indian Petrochemicals (5.33 per cent), Bharat Forge (4.59 per cent), Tata Steel (4.1 per cent), Tata Motors (3.8 per cent), I-flex (3.6 per cent), Ambuja Cements (3.6 per cent), Infosys (3.6 per cent) and Siemens (3.6 per cent). However, United Spirits (19.6 per cent), Jai Prakash Associates (6.3 per cent), BF Utilities (7.6 per cent), Glenmark (5.2 per cent) and Grasim (3.6 per cent) saw an increase.

Read more in The Economic Times article.