HOV Services @ Rs 165 ~ Update ~ Enhanced instead of Diluted Stake in Source HOV
Post Closing and this evening HOV Services has send a Notification to the Exchanges on the Merger whihc BSE has posted as below
“With reference to the earlier announcement dated November 05, 2014, HOV Services Ltd has now informed BSE that post merger of BancTec Group LLC with SourceHOV Holdings Inc. (SourceHOV), the stake holding of HOVS LLC in SourceHOV has increased to 44.82% in the combined entity, as majority stakeholder the Rohatyn Group (“TRG”) (formerly known as CVCI) exited out in the merger.”
What is really happening !?
Had recently covered it a few times,the last being nearly a month ago as linked below
Update On HOV Services @ Rs 178 ~ Sense Little Downside & Huge Upside Yet
November 6th, 2014
Earlier HOVS LLC ,a wholly owned subsidiary of the Indian listed HOV Services, held a 26.1% pre merger stake in US based SourceHOV which was being proposed to be sold for just US $ 95 million to the Promoter related entities themselves
It was expected that this stake would dilute with the merger of BancTec (taken over by promoters earlier in 2014) into SourceHOV
Instead the stake has increased to 44.82% in the merged entity !
It means HOVS LLC must have purchased some of exiting Rohatyn Group Majority Shareholding because it surely did not hold any shares in BancTec and thus would not have received any SourceHOV Shares in exchange for such shares held in BancTec ! …How do we know it surely did not hold shares in BancTec ? …because such a holding would have had to be disclosed by Indian Listed HOV Services…at what price or valuation was this enhancement executed?…and how was it funded !?
So what is happening !?
Where is the disclosure by HOV Services to the Exchanges on the status of the proposal to sell 26.1% of the pre merger holding in SourceHOV to the Promoter related Entities?
Where is also the disclosure to the Exchanges on the issue filed by a few minority shareholders before the Company Law Board on the contention that US $ 95 million is an understatement of the valuation of this 26.1% pre merger Stake ?
In any case the merged Entity will have Revenues over US $ 900 million and surely a stronger Valuation !
So this enhanced stake of 44.82% should make HOV Services stronger !…and is the Board now going to consider selling this enhanced stake to Promoter related entities !?
What a Maze being created of pre and post Merger Holdings & Entities and Valuations !…and recent Chronology of Events that created this maze point to a very deliberate gameplan being executed