US-based PE firm to partner iGate to bid for Satyam

17 Mar 2009, ET Bureau

MUMBAI: A US-based private equity firm will partner with Phaneesh Murthy’s iGate to bid for Satyam Computer Services. Although the PE firm has not put in an expression of interest, the partnership with iGate is in line with Satyam board’s stipulations that companies bidding to acquire the software company need to have access to sufficient funds, said iGate CEO Phaneesh Murty.

The unnamed PE firm has funds worth around $5.5 billion under its management. The firm is partnering with iGate because of the management expertise in running an IT business, Mr Murty added.

As per the conditions laid out by the Satyam board, iGate will have to show access to a minimum amount of Rs 1,500 crore on or before March 20, to be eligible for the bidding process. In the next stage, the company will get access to financial, legal and business documents based on which it will put in its bid, along with the PE player.

iGate had earlier decided not to bid for Satyam but later revised its stance and put in an expression of interest. However, the decision for an initial bid is based on the understanding that the restated financials of satyam for January 2009 and February 2009, will be provided, as well as a management estimate of the business in 2009.

"There are three issues here: to what extent are the revenues flawed, have customers moved away and are still moving away, and the recession," said Mr Murthy.