Global BPO lifts proposed size of self tender offer by 9.37 million shares

By Jennifer Chiou

New York, July 18 - Global BPO Services Corp. announced that it will increase the potential size of its planned self tender offer to include up to an additional 9,374,999 shares of its common stock, lifting the maximum amount to 30 million shares assuming that no shares are converted.

The added figure marks the maximum number of shares that stockholders of Global BPO may convert into a pro rata share of the trust fund while still approving the acquisition of Stream Holdings Corp.

On July 2, the Federal Trade Commission granted early termination of the Hart-Scott-Rodino waiting period in the proposed equity investment by Ares Corporate Opportunities Fund II, LP in Global BPO in conjunction with Global BPO's acquisition of Stream Holdings.

On June 2, Global BPO announced it would begin an $8-per-share tender offer for the purchase of up to 20,625,001 shares of its outstanding common stock.

Under the terms of the original agreement between Global BPO and Ares, Global BPO had agreed to issue and sell to Ares for $150 million, 150,000 shares of convertible preferred stock having an initial conversion price of $8 per share, subject to downward adjustment based on the number of shares for which conversion rights are elected.

The conversion price would be adjusted to $6 if holders of 9,374,999 shares of Global BPO common stock elected conversion rights in connection with approval of the Stream acquisition.

As a result, the company said that in view of the increase in the size of the tender offer and the likelihood that shares as to which conversion rights might otherwise have been elected will instead be tendered in the tender offer, Global BPO and Ares have agreed to set the conversion price of the shares of convertible preferreds to be sold to Ares at $6.

In connection with and assuming approval of the acquisition of Stream, Global BPO stockholders who vote against the Stream acquisition have the right to elect to convert their shares into an amount in cash equal to the pro rata portion of the proceeds from Global BPO's initial public offering that are held in a trust account. The rate is $7.93 per share as of June 30.

If holders of 30% or more of the shares elect to convert their shares, the acquisition will be considered not to have been approved.

To simplify the choice available to stockholders, Global BPO is increasing the tender maximum by 29.9% of the outstanding shares, which are shares that could be converted while still approving the Stream acquisition.

Accordingly, if conversion rights are elected for the 9,374,999 shares, the tender offer would be for the original 20,625,001 shares; and if conversion rights are elected as to no shares, the tender offer would be for 30 million shares, Global BPO noted.

As already reported, the offer would be funded using the proceeds from the issuance of convertible preferreds and other available cash resources, including availability under the company's proposed revolving credit facility and term debt of about $108 million.

Global BPO shareholders will vote on the investment and the acquisition at the company's annual meeting of stockholders on July 29.

Ares, a private equity group, and Global BPO agreed to acquire customer relationship management provider Stream Holdings for $200 million, a prior news release said.

Boston-based Global BPO was formed as a special-purpose acquisition corporation and has no significant operations.

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