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Hughes Soft, Tele to call EGM

Our Bureau

MUMBAI, Oct. 29

BOTH Hughes Software Systems Ltd and Hughes Tele.com today decided to convene an extraordinary general meeting to seek shareholder approval for a possible change in control following the merger of Hughes Electronics Corporation with EchoStar Communicatio ns Corporation in the US.

Hughes Network has a 56.1 per cent stake in Hughes Software and a stake of 24.8 per cent in Hughes Tele.com (fixed telephony services provider in Maharashtra and Goa circles).

In a notice sent to the stock exchanges, Hughes Software said no minimum public offer is likely to be made "since there is no agreement or intention to acquire Indian shares of Hughes Software Systems and since the amalgamation is not an indirect acquisi tion of Hughes and since there is no change in control or agreement to change control."

Hughes.Tele.com has sent a similar notice to the stock exchanges.

Notwithstanding this, the share price of Hughes Software rose by Rs 37.9 on the BSE today, in anticipation of a public offer, to close at Rs 227.45.

"The market feels a public offer is likely if there is a management change. The previous example of Castrol has led us to believe this," said Mr Vipul Shah, Head of Portfolio Advisory Services at Prabudas Lilladhar.

According to him, the company has only one tool by which it can prevent making an open offer, that is, if its shareholders agree there is no need for such a move.

This is unlikely, say analysts: "The market feels no shareholder will vote against this, when on a rough calculation, the offer price taking the last six months' average works out to over Rs 540, with the share quoting at Rs 227 today."

The Hughes Tele.com share rose marginally on the BSE, up by 10 paise, to close at Rs 8.10.