NASDAQ-listed PeopleSupport, Inc. has rejected IPVG Corp. and AO Capital Partners’ proposal to acquire at least a majority stake in the call center company.

In the company’s Web site, the offshore business process outsourcing (BPO) provider reported the unanimous decision of the company’s board of directors against the proposal after consulting its financial and legal advisors.

IPVG and AO Capital’s all-cash proposal gave PeopleSupport a valuation of $355 million or $15.00 per share. "Taking into account the recent initiatives under way at the company, and 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 Lance Rosenzweig, PeopleSupport chief executive officer and chairman.

Mr. Rosenzweig said PeopleSupport recently concluded a strategic planning session, which was aimed at fuelling the growth of the US-based firm.

To ensure the firm’s growth, Mr. Rosenzweig added that it would invest in sales organization, expand its service offerings, enhance infrastructure and improve margins.

"We have carefully reviewed the proposal and believe it to be inadequate and not to merit further attention," said Frank Perna, speaking in behalf of PeopleSupport’s independent directors.

IPVG Chief Executive Officer Enrique Y. Gonzalez said: "We are evaluating their letter and we will respond shortly."

Last week, PeopleSupport said that it could not beat the Dec. 7 deadline given by IPVG and AO Capital to respond to the purchase proposal.

In its nine-month financial report, PeopleSupport registered an increased net income of $14.1 million from $10.2 million in 2006. Revenues increased to $104.9 million from $79.1 million in 2006.

According to its full fiscal year guidance, PeopleSupport is expecting its revenue to be between $140.6 million and $141.4 million at yearend, while operating income is expected to be in the range of $3.6 million and $3.9 million for the same period.

In its letter-proposal to PeopleSupport, IPVG said its offer represented "a valuable opportunity that benefits both of our companies and our respective stockholders."

IPVG signed a memorandum of understanding with AO Capital to jointly raise and infuse the necessary internal and third-party generated debt and equity financing.

PeopleSupport has an 8,000-seat operation in the Philippines offering customer care, inbound sales, technical support and direct response sales services.



(BusinessWorld: I.T. Matters - News)