The Securities and Exchange Board of India has granted exemption to Fox Entertainment Group, New America Inc and FEG Holdings from making an open offer to the shareholders of Hughes Software Systems.

The Australia-based News Corporation proposes to acquire 34 per cent stake in Hughes Electronics Corporation as a part of a global transaction.

HEL indirectly holds 55.44 per cent equity shares in Hughes Software Systems Ltd.

In respect of the proposed acquisition under global transaction, News Corporation, along with persons acting in concert, had made a public announcement on July 14, 2003 to the shareholders of Hughes Software to acquire an aggregate of 20 per cent of equity share capital in order to comply with the Takeover Code.

After closure of the global transaction, News Corporation proposes to reorganise the shareholding in HEC so that its holding interest in the company will ultimately be held by Fox Entertainment Group Inc an entity in which News Corporation indirectly exercises approximately 97 per cent voting control.

This reorganisation is to be effected through a series of 'inter company transfers' among wholly owned subsidiaries of News Corporation  and will occur in immediate succession.

There will be a transfer of shares of HEC by News Publishing Australia Ltd to New America Inc. a US company and wholly owned subsidiary of NPAL.

Shares will be transferred from NAI to FEG Holdings Inc, a US company and wholly owned subsidiary of NAI, and finally from FEGH to FEG, a US company in which FEGH hold approximately 97 per cent of voting control.

FEG, NAI and FEGH moved Sebi, seeking exemption from making an public announcement and open offer.

According to the acquirers the primary purpose of the internal  group transfers is to reorganise the holding of the shares of HEC so that FEG is the ultimate holder of the latter.

They also submitted that internal group transfers will not have any adverse effect on shareholders of Hughes.

Green signal

News Corporation proposes to acquire 34 per cent stake in Hughes Electronics Corporation as a part of a global transaction.

Hughes Electronics indirectly holds 55.44 per cent in Hughes Software Systems.

News Corporation proposes to reorganise the shareholding in Hughes Electronics so that its holding interest in the company will ultimately be held by Fox Entertainment.