In May 2016, a merger agreement was entered into between Hewlett Packard Enterprise (HPE), Computer Sciences Corporation (CSC) and DXC Technology Company. The transactions contemplated under the agreement were completed in April 2017.
Under the agreement, CSC merged with a wholly-owned subsidiary of DXC resulting in DXC becoming the parent company of CSC.
CSC is the parent company of XChanging Solutions and owned 78.77 per cent of the voting share capital. Thus, DXC through CSC indirectly acquired 78.77 per cent of the voting share capital of the target company.
The public announcement required to be made in May 2016 by the applicant as the acquirer (along with DXC and CSC as persons acting in concert) was done only in November 2017, as per Sebi.
After the open offer, the shareholding of the promoter and the promoter group, including the applicant, in XChanging Solutions rose to 90.8 per cent. This was in violation of Minimum Public Shareholding (MPS) requirement and the same was complied with a delay.
Pursuant to the settlement application, the applicant informed Sebi's internal committee that there is an appeal pending in the SAT. It was filed by an investor, mainly contesting the issue of open offer price.
The applicant proposed the revised settlement terms and "undertook to pay the differential settlement amount in the event the outcome of appeal filed in not in favour of the applicant and if the offer price as contested in the said appeal is enhanced, subject to outcome of any further litigation to settle the defaults...," it noted.
The applicant remitted the settlement amount and undertook to pay the differential settlement amount, if any, in case of adverse outcome of the appeal filed in the tribunal following which the regulator disposed of the case.
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