Aegis BPO's PeopleSupport buy hits hurdle

US law firm Levi & Korsinsky has announced an investigation into the proposed acquisition of Nasdaq-listed PeopleSupport by Aegis BPO, an Essar Group company, for $250 million (around Rs 1,050 crore). Under the terms of the agreement, Aegis BPO will pay the shareholders of PeopleSupport $12.25 a share in cash.

"Levi & Korsinsky usually investigates a deal when any of the clients complain about chances of fraud in the transaction. In Aegis's acquisition of PeopleSupport, we received a complaint from a client who is a shareholder of PeopleSupport. After our investigation, if we find any fraud, we will take up the issue before the court. At this point of time, we can not disclose the name of the client," said Juan E Monteverde, associate, Levi & Korsinsky.

Levi & Korsinsky, the NewYork-based law firm, represents victims of securities fraud, mutual fund abuse and consumer fraud. Aegis BPO officials declined to comment on the issue. When contacted, investment bankers accepted that this was not an unknown phenomenon in the US, but maintained that the actual impact could be minimal.

"Generally, some disgruntled shareholders and minority shareholders do this if not happy with the transaction. Ultimately, the SEC decides on the transaction," said a banker, who wished to remain anonymous.

Earlier this week, the company had announced that it will acquire the Philippines-based PeopleSupport in an all-cash deal. The merger was approved by the boards of the respective companies. The merged entity, to be called Aegis PeopleSupport in the Philippines, will have an employee base of 29,000 across the Philippines, India and the US.