Galleon asks PeopleSupport to remove poison pill, consider auction for additional proposals

By Lisa Kerner

Charlotte, N.C., Dec. 5 - PeopleSupport, Inc. investors led by Galleon Management, LP urged the company's board to carefully study the recent unsolicited proposal from IPVG Corp. and AO Capital Partners seeking to acquire the company for $15 per share.

In addition, Galleon asked the board to remove its poison pill or at least amend it to allow existing shareholders to participate in proposals.

While Galleon said it supports "any transaction that would maximize shareholder value," it insisted that the board conduct an auction to elicit additional competing proposals.

Galleon's comments were made in a Dec. 4 letter to the company that was included in a schedule 13D filing with the Securities and Exchange Commission.

Galleon said it has been approached by third parties interested in a potential acquisition that would also involve Galleon's participation. "This participation could take many forms, including the conversion of our interest in PeopleSupport into an equity stake in the resulting entity in lieu of receiving the cash consideration," Galleon said in the letter.

"Indeed, we believe that given the substantial size of our investment in PeopleSupport and our existing relationships in the space, we can be instrumental in assisting PeopleSupport maximize shareholder value," the letter stated.

Galleon owns 3,468,162 shares, or 14.7%, of the Los Angeles-based offshore business process outsourcing provider.

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