Although PeopleSupport Inc. [PSPT] is considering signing a nondisclosure agreement with Philippine outscourcer IPVG Corp. and Asian private equity firm AO Capital Partners Inc., the business process outsourcing firm is still likely to reject the duo's $385 million acquisition offer.

IPVG disclosed on Tuesday that it is discussing the terms and conditions of the NDA with PeopleSupport. IPVG and AO Capital on Jan. 11 made a $17 a share offer for the company after PeopleSupport in December rejected their $15 a share offer.

In a research note out Tuesday morning, Friedman, Billings & Ramsey & Co. analyst Matthew McCormack says he expects the spread between the $17 offer price and PeopleSupport's share price will tighten Tuesday in light of the news. But he predicts PeopleSupport will ultimately reject the offer as inadequate based on 2008 financial guidance the company issued in December.

PeopleSupport shares this morning traded at $14.78, up 0.75%, a sizable discount from $17 offer price. - David Shabelman