Indigo Tech Rejects Hcl Deluxe 'Friendly' Bid

HCL Deluxe Ltd's offer for a `friendly' takeover of Indigo Technologies, the Indian subsidiary of Indigo International, has been rejected by the promoters of Indigo Technologies. Compaq Inc of the US holds a 24 per cent equity stake in Indigo International.

HCL Deluxe, a 50:50 joint venture between the Rs 2,300-crore HCL group and Deluxe of the US, had mounted a takeover bid on Indigo recently, it is learnt.

When contacted by Business Standard, Indigo's promoter, president and chief executive officer, Sashi Chimala declined to comment. "As a corporate policy we do not comment on such issues," he said.

It is, however, learnt that HCL Deluxe had proposed a merger of Indigo with itself. Under the proposal, Indigo's identity, well known in the securities and banking software circles, would be retained even after the proposed merger.

 

Other details like the stock swap ratio that HCL Deluxe had offered to Indigo's shareholders are, however, not known.

Indigo has been getting such offers and HCL Deluxe was one of them, it is learnt. But company sources assert that the company is not up for sale.

Though Indigo is understood to have turned down HCL Deluxe's take-over offer it has recognised the synergies that exist in the operations of both the companies.

But HCL Deluxe and Indigo are understood to have reached an informal strategic alliance to work together in some areas.

"To leverage our strengths in banking and securities, Indigo has always counted upon partnerships with premier corporates such as HCL Deluxe in providing total solutions to the customers," Chimala conceded. Both Indigo and HCL Deluxe specialise in offering solutions to the banking, finance and securities sector.

Indigo Technologies is a wholly-owned subsidiary of Indigo International of the US. Tandem initially had a 24 per cent stake in the US-based parent of Indigo. But with Compaq's takeover of Tandem, the 24 per cent stake in Indigo will now move on to the former.

The Indian promoters and key employees hold 38 per cent in Indigo International. Indus Ventures holds 29 per cent and the remaining nine per cent is held by TDICI. HCL Deluxe has drawn up aggressive plans for the banking software sector in the country.

The company has set up a software development centre in Chennai and is in the process of recruiting 500 software professionals.