Electronic Data Systems (EDS) has made an all cash conditional open offer of Rs204.5 ($4.58) a share for 83 million shares of Bangalore-based applications and business process outsourcing (BPO) services company MphasiS BFL Ltd. The offer represents a 30-per cent premium to Mphasis stock's 26-week average price.

The offer is contingent upon EDS acquiring the 83 million shares, representing approximately 52-per cent of current shares outstanding. The deal, if it materialises, would amount to $380 million (over Rs1,700 crore) for a 52-per cent stake in Mphasis. Analysts consider the offer below the market value of Mphasis.

Baring Private Equity Partners (India) Ltd., which holds 35-per cent stake in MphasiS, is likely to sell the stake to EDS in the open tender, if it materialises.

EDS had $1.9 billion in cash and cash equivalents as of December 31, 2005. It has set April 25 deadline for any competitive bids and says that it retains the right to revise the offer price or the number of shares till June 1.

The offer managed by Citigroup would be open between May 22 and June 12.

In a departure from the joint venture route to establish a presence in India, EDS has opted to attempt buying an Indian company.

According to Mike Jordan, chairman and CEO, EDS, the offer was complementary to EDS' overall strategy to enhance its presence and capabilities in India.

The deal could be a precursor to similar buyouts of mid-sized Indian unlisted technology firms, facing intense pressure from larger rivals such as Tata Consultancy Services and Wipro Ltd.

Mphasis has responded positively to the offer and is holding a board meeting today to discuss details of the bid with Jerry Rao, MphasiS chairman, terming the offer as as a strategic and cultural fit.

In a statement Rao said, "We are very supportive of this transaction and look forward to its successful closure."

MphasiS employs around 11,000 people in India and services clients like Citigroup Inc. and JPMorgan Chase & Co. The company has a presence in various sectors that include financial services, transportation, technology and healthcare.

Acquiring MphasiS would help EDS boost its Indian headcount to 14,000 from 3,000, but it would trail IBM's 38,500 employees in India, and Accenture's 17,500.