PeopleSupport rejects buyout offer
Shares of PeopleSupport Inc. (Nasdaq: PSPT) have edged upward on news after the close on Wednesday that the provider of offshore business process outsourcing services has rejected an acquisition bid from IPVG Corp. and AO Capital Partners.
“After a careful and thorough review of the proposal, the board concluded that the proposal is not in the best interests of PeopleSupport or its shareholders,” said chairman and CEO Lance Rosenzweig in a statement.
The Los Angeles-based company had received an unsolicited $15 per share bid from Philippines-based IPVG, which is primarily engaged in business process outsourcing and information technology, and investment firm AO Capital Partners.
Looking ahead, PeopleSupport also released preliminary guidance for the full fiscal year ending Dec. 31.
The company, which has about 9,000 employees worldwide, expects revenue between $180 million and $190 million, well above Wall Street’s projections of $140.66 million.
Earnings are forecasted between $0.65 per share and $0.81 per share, which is below analysts’ projected earnings of $0.87.
“Although PSPT is taking great strides toward improving operations, we are concerned that the truncated period in which the company developed guidance could contribute to increased volatility,” said analyst Samuel Sanders with investment bank Susquehanna Financial Group in a research note. Sanders is maintaining a “neutral” rating.
At 12:54 p.m. ET, shares of PeopleSupport (PSPT) had advanced $0.19, or 1.38%, to $13.96. The 52-week high of $24.41 was reached on Feb. 8, while the 52-week low of $8.19 was set on Aug. 6.
