New Delhi: BPO major Genpact will repurchase its common shares worth up to USD 300 million (about Rs 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 yesterday night said: "It intends to purchase up to USD 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 USD 311.6 million in cash from operations in 2013, up from USD 310.7 million of cash a year earlier, which included about USD 45 million from an upfront client payment. It had about USD 571.3 million in cash and cash equivalents as of December 31, 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 USD 16.50 per share and not greater than USD 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 USD 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million in shares, or such lower amount depending on the number of shares that are properly tendered and not properly withdrawn, the company said in the filing.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 USD 16.50 per share, Genpact would repurchase a maximum of 18,181,818 shares, or approximately 8 percent of Genpact's outstanding common shares as of February 28, 2014," it added.
The tender offer will expire at midnight, New York City time, at the end of the day on April 2, 2014, unless extended or withdrawn.