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Business News/ Companies / Genpact to repurchase shares worth $300 mn
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Genpact to repurchase shares worth $300 mn

Genpact will repurchase its common shares under a modified 'Dutch auction' tender offer

Genpact intends to finance the share repurchase from available cash and cash equivalents and borrowings under its existing credit facility. Photo: MintPremium
Genpact intends to finance the share repurchase from available cash and cash equivalents and borrowings under its existing credit facility. Photo: Mint

New Delhi: BPO firm Genpact will repurchase its common shares worth up to $300 million (about 1,839 crore) under a modified “Dutch auction" tender offer starting on Thursday. Dutch auction is a public offering auction structure in which the price of the offering is set after taking in all bids and determining the highest price at which the total offering can be sold.

In a filing to US SEC, Genpact late on Wednesday night said: “It intends to purchase up to $300 million of its common shares through a modified ‘Dutch auction’ tender offer that it expects to commence on March 6, 2014."

Also in some cases, the price on an item is lowered until it gets a bid. The first bid made is the winning bid and results in a sale, assuming that the price is above the reserve price.

“Genpact intends to finance the share repurchase from available cash and cash equivalents and borrowings under its existing credit facility," the filing added.

Genpact generated $311.6 million in cash from operations in 2013, up from $310.7 million of cash a year earlier, which included about $45 million from an upfront client payment. It had about $571.3 million in cash and cash equivalents as of 31 December 2013.

Under the terms of the tender offer, Genpact shareholders will have the opportunity to tender some or all of their shares at a price per share of not less than $16.50 per share and not greater than $18 per share, it said.

Based on number of shares tendered and prices specified by the tendering shareholders, Genpact will determine the lowest per share price within the range that will enable it to purchase $300 million in shares, or such lower amount depending on the number of shares that are properly tendered and not properly withdrawn, the company said in the filing.

“At the minimum price of $16.50 per share, Genpact would repurchase a maximum of 18,181,818 shares, or approximately 8% of Genpact’s outstanding common shares as of 28 February 2014," it added. The tender offer will expire at midnight, New York City time, at the end of the day on 2 April 2014, unless extended or withdrawn.

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Published: 06 Mar 2014, 07:47 PM IST
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