BANGALORE (Reuters) – Fraud-hit Satyam Computer Services Ltd (SATY.BO) said on Friday that Indian and international firms, including private equity companies, had registered to bid for a controlling stake.
The outsourcing company said it had received an adequate response but did not name or number the bidders.
Two investment banking sources told Reuters some eight potential suitors had registered to bid for a 51 percent stake.
“There have been at least 5-8 bids. We expect a much, much smaller number to proceed to the next stage of putting in a financial bid,” said a banker with knowledge of the deal who asked not to be identified.
Indian engineering firm Larsen & Toubro (LART.BO), IT services firm Tech Mahindra (TEML.BO), diversified Spice Group and U.S. outsourcer iGate Corp (IGTE.O) all said they had registered as potential bidders.
Bidders must submit a detailed expression of interest and have available at least 15 billion rupees ($290 million) by March 20.
Satyam Chairman Kiran Karnik told Reuters the registration process did not require companies to meet any conditions.
“The names could include PE firms or law firms which are representing somebody else. At this stage we have not asked them to divulge who their partner is or who they are,” he said.
“So at this stage, frankly you have no idea. It could be a law firm that’s representing X, Y or whatever, or it could be just a frivolous one. We will really know that on March 20th.”
Satyam looks an attractive takeover target given the massive plunge in its share price and a long list of marquee clients, including General Electric (GE.N) and Qantas Airways (QAN.AX).
But bidders face a tough job in valuing the company due to uncertainty about its accounts and liabilities. [ID:nBOM373627]
Analysts said it was unlikely suitors would bis aggressively as the company’s accounts had yet to be restated and there was no clarity about legal liabilities arising from class action lawsuits filed in the United States.
New York-listed Satyam (SAY.N) has been fighting for survival since founder and Chairman Ramalinga Raju quit on Jan. 7, saying profits had been overstated for years and assets falsified in what became India’s biggest corporate scandal.
Its shares fell 3.6 percent to 45.50 rupees on Friday in a market .BSESN that rose nearly 5 percent, giving a market value of $600 million compared with $7 billion last May.
iGate, a U.S.-based mid-sized outsourcing firm, said in a statement it wanted to see the latest financial statements and an update on Satyam’s liabilities, but said it was a long way from making a formal bid.
By Sumeet Chatterjee
(Additional reporting by Narayanan Somasundaram in MUMBAI; Editing by John Mair)