PeopleSupport shareholders approve Aegis BPO merger; deal expected to close by Oct. 31

By Jennifer Chiou

New York, Oct. 8 - PeopleSupport, Inc. and Aegis BPO, part of the Essar Group, announced an expected closing date of no later than Oct. 31 for their merger in a cash transaction with an aggregate equity value of about $250 million.

PeopleSupport also said it obtained approval of the merger from holders of more than 75% of its common shares.

Essar Services (Mauritius) said it confirmed its intention to complete the acquisition of PeopleSupport and also reaffirmed that the transaction is not subject to financing.

The company noted that its request for a delay in the closing date was due to the unprecedented disruptions in global capital markets affecting movement of funds and its desire to implement the transaction with an optimal capital structure.

All parties also noted that they have agreed to waive the condition relating to filings with the Committee on Foreign Investment in the United States under the Exon-Florio Provision.

Both companies' boards of directors approved the strategic combination, it was reported in a form 8-K filed with the Securities and Exchange Commission on Aug. 4.

As already reported, the merger agreement calls for Aegis BPO to pay PeopleSupport stockholders $12.25 per share in cash through Essar Services (Mauritius).

An $8.7 million termination fee is also included in the agreement, according to the previous filing.

According to PeopleSupport, the offer price is a 29% premium over its closing share price on Aug. 1.

Following the merger, Aegis BPO said it expects to become a leader in the rapidly growing global business process outsourcing market with operations in India, the Philippines, the United States and Costa Rica.

Credit Suisse is advising PeopleSupport, while Aegis BPO is being advised by UBS and Edelweiss Capital.

Aegis BPO is a Mumbai, India, business process outsourcing company. Essar Group is an Indian conglomerate.

PeopleSupport is an offshore business process outsourcing provider that offers customer management, transcription and captioning and additional BPO services. The company is located in Los Angeles.

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