IBM, Cognizant, Cap Gemini vie for Satyam

By siliconindia   |   Monday, 29 December 2008, 19:44 IST   |    3 Comments
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New Delhi: Satyam Computer Services is being considered for a take-over by major IT firms like IBM, Cognizant and Cap Gemini after the company announced the possible dilution of stake by B Ramalinga Raju, Founder and Promoter, Satyam. Satyam is confronting a major shareholder upheaval on poor governance after it ended bid to buy two firms linked to its founder. Despite the recent developments, IT analysts consider that the company is a good buy, as the India outsourcing story is intact. IBM is considered to have strong expertise across verticals. So, it is well positioned to leverage on its current strengths. An acquisition of a company like Satyam will further strengthen the Big Blues global services delivery capability, reported The Economic Times. Along with global IT services firms, major private equity funds such as General Atlantic Partners (GAP) together with other PE players can look at picking up a stake in Satyam. Cognizant Technologies is also one of the suitors. Institutional investors led by Aberdeen Asset Management, Fidelity and ICICI Prudential, who hold a 61 percent stake in Satyam, are closely monitoring what moves the Satyam brass would make to win back their confidence and restore the credibility of the company, after it aborted attempt to acquire Maytas Properties and Maytas Infra. Satyam shares have nearly halved in value after it first unveiled the Maytas acquisition plans, and institutional investors, who are deeply unhappy with the company's management, are understood to have approached rival firms and buyout funds to sell their stakes and push for the takeover.