iGate not to bid for Satyam at current market price: Murthy

16 Mar 2009, PTI


NEW DELHI: US-based outsourcing company iGate on Monday said it would not go for Satyam Computer at its current market price and sought more clarity on the financials and liabilities of the target company before the final bidding.

At Monday's share price of Rs 45.30 (88 cents), Satyam is valued at Rs 3,049 crore. Murthy had earlier said the company could bid below 90 cents a share.

Though he did not comment on valuation, he said the value of Satyam Computer is continuously being eroded.

"We have heard that customers and employees of (Satyam) were leaving and are concerned about the value erosion. The January and February numbers may not necessarily capture the future impact of customer loss in those months. Hence, I believe the estimate of 2009 revenue outlook is an important piece of information to have, especially in this current slowdown environment", he said.

iGate joined the fray for acquiring Satyam after dithering for some time. Murthy said he is yet to even take call if at all iGate would bid.

"If I dont get the fresh set of financial information including the January and February numbers, I would not be interested in bidding. If we get the full financial information, we need to study and understand the extent of liabilities for us to take a call on whether we want to take it forward", he said.

"From the information that we have gathered, I think our bid will be lower than the current market price. But we will have more clarity once we have access to the new financial numbers and once we have studied and analysed the fresh set of numbers, including the extent of liabilities," Murthy said.

Satyam Computer, which has a few class action suits filed against it in the US, is struggling for survival since January when its founder B Ramalinga Raju disclosed that he has falsified accounts and inflated profits for years .

Following the revelation, the government took over the board and the company is now in process of selling a majority stake to a strategic investor.

Besides iGate, engineering giant L&T, IT firm Tech Mahindra and Spice Group have submitted their expressions of interest for acquiring 51 per cent in Satyam.