General Atlantic, Patni may join hands for Satyam bid
Texas Pacific Group and General Atlantic (GA), among other private equity funds, are looking to team up with Indian IT companies to acquire the troubled Satyam Computer Services.
By George Smith Alexander & N Shivpriya, ET Bureau |
MUMBAI: Texas Pacific Group and General Atlantic (GA), among other private equity funds, are looking to team up with Indian IT companies to acquire the troubled Satyam Computer Services. However, these investors are anxious to know how the company could be ring-fenced from class-action suits in the US and other possible liabilities.
Investment banking sources said that GA may join hands with Patni Computers to consider a bid for Satyam. Other Indian companies eyeing the IT firm are iGate Corporation, Tech Mahindra and L&T Infotech.
Speaking to ET, iGate CEO Phaneesh Murthy, a former Infosys Technologies execuitve, admitted that PE players have been in touch with him for a joint bid for Satyam. ���They were in touch with me before the fraud came to light and even after that. However, we have to wait and watch till the some of the issues around Satyam become clearer,��� Mr Murthy told ET recently.
A senior Tech Mahindra executive said PE players had approached the company to explore the possibility of a partnership. ���The matter is will be discussed at the board meeting on the 23rd but a decision is unlikely.���
But the strongest contender among the three seems to be a GA-backed bid by Patni Computer Systems. GA holds 16% in Patni.
A one-time a top exporter, Patni has fallen behind in the ranks and has been replaced by others, like HCL Technologies, and, more recently, by Tech Mahindra. Acquiring Satyam���s business will put it back in the reckoning and in a position to compete for large IT contracts. Over the last one year, Patni has also worked towards bringing in a professional management. Jeya Kumar, earlier with Sun Microsystems and currently with MphasiS, is slated to join Patni as CEO from next month.
Bankers, apparently, had internally looked at different models, including breaking up the company into - the good and the bad part. However, in this case, investors of Satyam���s ADR issue would not have a good enough legal recourse. One of the bankers said that in case the company gets broken up, there could be a chance that US investors would reject all future issuances from India.
An official from one of the other organisations which are looking investing in Satyam, ���The appointment of the board has been a step in the right direction. However the board will have to now move fast and decide on the management team. The management team will have to be put in place in the next couple of weeks to stem the business and employees.���
Investment banking sources said that GA may join hands with Patni Computers to consider a bid for Satyam. Other Indian companies eyeing the IT firm are iGate Corporation, Tech Mahindra and L&T Infotech.
Speaking to ET, iGate CEO Phaneesh Murthy, a former Infosys Technologies execuitve, admitted that PE players have been in touch with him for a joint bid for Satyam. ���They were in touch with me before the fraud came to light and even after that. However, we have to wait and watch till the some of the issues around Satyam become clearer,��� Mr Murthy told ET recently.
A senior Tech Mahindra executive said PE players had approached the company to explore the possibility of a partnership. ���The matter is will be discussed at the board meeting on the 23rd but a decision is unlikely.���
But the strongest contender among the three seems to be a GA-backed bid by Patni Computer Systems. GA holds 16% in Patni.
A one-time a top exporter, Patni has fallen behind in the ranks and has been replaced by others, like HCL Technologies, and, more recently, by Tech Mahindra. Acquiring Satyam���s business will put it back in the reckoning and in a position to compete for large IT contracts. Over the last one year, Patni has also worked towards bringing in a professional management. Jeya Kumar, earlier with Sun Microsystems and currently with MphasiS, is slated to join Patni as CEO from next month.
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���The company will have to be ring-fenced from all potential claims, including class-action suits. The investors could go after the auditors and the promoters as the fraud was not perpetrated by the company. It may prove difficult to break the company into different lines of business,��� one of the investors said.Bankers, apparently, had internally looked at different models, including breaking up the company into - the good and the bad part. However, in this case, investors of Satyam���s ADR issue would not have a good enough legal recourse. One of the bankers said that in case the company gets broken up, there could be a chance that US investors would reject all future issuances from India.
An official from one of the other organisations which are looking investing in Satyam, ���The appointment of the board has been a step in the right direction. However the board will have to now move fast and decide on the management team. The management team will have to be put in place in the next couple of weeks to stem the business and employees.���
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