Accel up on takeover buzz

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Accel Frontline rose 50 per cent last week, with the aggregate trading volumes jumping from 3 lakh shares to 16 lakh shares. The trigger came from the news that the company will soon become a subsidiary of British Telecom.

The Chennai-based IT company is 42 per cent owned by Frontline Technologies Corporation (FTC) of Singapore, 30 per cent by the Indian promoter Accel and 28 per cent by Indian public.

There was an announcement on December 6 at the Singapore stock exchange that British Telecom, through BT Singapore, would buy out FTC. Concurrently, FTC is buying 9 per cent in Accel Frontline from the Indian promoter. When these two transactions are completed, Accel Frontline will be 51 per cent owned by the $18-billion British Telecom.

The Rs 185-crore Accel Frontline provides a range of IT services, including infrastructure management, ERP consulting, banking solutions and networking. It also runs a BPO. The company expects a turnover of Rs 270 crore in the current year.

This is then a case of 'indirect acquisition' of an Indian company through an overseas transaction, and hence there can not be an open offer.