iGate cancels announcement of deal with Patni

iGate-Apax consortium was front runner to buy majority stake in patni

PTI | January 3, 2011



IT firm iGate today said it has called off announcement of its "significant corporate development", where it was expected to notify its deal for buying 63 per cent stake in Patni Computer Systems.

"The significant corporate development that was set to be announced on Monday is off," iGate said in a brief statement tonight without assigning any reasons.

A company official when contacted declined to elaborate on the development.

The iGate-Apax consortium, which is tipped to be the front-runner for acquisition of a majority stake in India's sixth largest IT firm, was expected to make the announcement tomorrow.

Patni brothers -- - Narendra Patni, Ashok Patni and Gajendra Patni -- were in talks to sell their 46 per cent stake, while private equity firm General Atlantic was selling its roughly 17 percent holding in the software services exporter.

Patni's promoters and General Atlantic have made several efforts to sell their stake since 2007, which failed because of disagreements between the brothers and the high valuation expectations of the sellers.

The iGate-Apax consortium, which is tipped to be the front-runner for acquisition of a majority stake in the Indian IT firm, had earlier in the day said it will announce a "significant corporate development" on Monday.

Sources in-the-know said the deal was related to the iGate-Apax consortium's estimated USD 1 billion bid to buy a majority stake in Patni Computer.

The announcement was to have been made by iGate Chief Executive Officer Phaneesh Murthy in Bangalore tomorrow.

A consortium led by private equity firm Carlyle was the iGate-Apax consortium's main rival in the take-over bid, but is understood to have dropped out of the race on account of the high valuation of the firm.

According to industry analysts, the iGate-Apax consortium will pay Rs 500-550 for each share of Patni Computer to be acquired, besides a non-compete fee to the promoters.

On Friday, shares of Patni closed at Rs 476.65 on the Bombay Stock Exchange, up 0.77 per cent from the previous close.

Patni, a mid-sized IT services firm, provides solutions to verticals like insurance, telecom, utilities and retail.

Patni's revenues for the year ended December, 2009, stood at Rs 1,751.33 crore (USD 391.79 million, at an exchange rate of Rs 44.70 per US dollar).

iGate's revenues, on the other hand stood at USD 74.8 million for the quarter ended September, 2010, and USD 193.09 million for the whole of 2009.

Closure of the deal would mark the culmination of several efforts by Patni's promoters and General Atlantic to sell their stake since 2007. Earlier attempts to sell a stake failed because of disagreements between the brothers and the high valuation expectations of the sellers.

iGate had also expressed interest in buying Satyam Computer Services, after the multi-crore scam perpetrated by founder Chairman B Ramalinga Raju broke out. Satyam has since been rebranded Mahindra Satyam, following its acquisition by Tech Mahindra.

 

Comments

 

Other News

How the mind can help the body heal itself

Why do some people recover from illness against all odds? Can our beliefs, emotions and consciousness influence the body’s ability to heal? Drawing on over three decades of experience in medicine, research and medical innovation, internationally trained ophthalmologist and author Dr Dinesh Verma ex

1,364 anti-cancer formulations to cost less from today

The National Pharmaceutical Pricing Authority (NPPA), under the Department of Pharmaceuticals, Ministry of Chemicals and Fertilizers, has capped trade margins on the Maximum Retail Price (MRP) of 137 anti-cancer drugs. This was based on the recommendations of an Expert Committee constitute

Who checks the books?

I read about the news about the Coimbatore library over coffee this morning. On the face of it, the headline was about a political ‘war’ between the DMK and TVK. But what stayed with me was something much more important than the blame game behind what had transpired. A writer walking through

Development paradox: Falling poverty miracle and an inequality problem

India’s reduction in poverty over the past decade is a development achievement of considerable significance. The World Bank’s April 2026 ‘India Development Update’ estimates that the share of Indians living below the international extreme-poverty line of $3.00 per person per day i

In Arunachal, a river we call mother

In Arunachal Pradesh, the Siang is not just a river. For many of us, especially the Adi people, it is part of our family. Our grandparents fished in it. Children learned to swim in it. Our farms drink from it. When someone says a huge dam will be built on it, we do not hear the word "project".

A new retelling of the Mahabharata delves into key moments

In a time when every decision carries consequences and questions of ambition, power, loyalty, identity and moral choice continue to shape our lives, Dr. Arun Krishnan’s new book, ‘Mahakshana’ (Penguin India) offers a strikingly relevant retelling of the Mahabharata.  

Upcoming Conferences



-->

Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter