Indian IT services giant Satyam Computer Services, which is currently reeling from the effects of financial fraud, said it has received proposals from several suitors including “select private equity firms”.
“Some have shown interest in evaluating Satyam as an integrated entity, while others have expressed interest in portions of Satyam’s business,” TN Manoharan, a Satyam board member, said in a statement.
He added that the firm is not likely to sell portions of its business as at this stage, such a sale would be “contrary to the mandate of regulating the affairs of Satyam as a going concern, as stipulated by the Government of India”.
TPG and General Atlantic are among the private equity firms interested in acquiring Satyam, the Economic Times reported. Quoting unnamed sources, the newspaper noted that private equity firms are looking to tie up with Indian IT companies for a possible bid for Satyam.
Senior executives from IT services companies Tech Mahindra and iGate told the paper that they have been approached by private equity players considering a joint-bid for Satyam. Patni Computers, in which General Atlantic holds a 16 percent stake, is likely to be among the frontrunners for a possible bid, the paper noted.
The company has appointed consulting Boston Consulting Group as a management advisor to support the company’s board and its management. It has also hired Goldman Sachs and Avendus to advise it on various options, including seeking strategic investors.
Satyam said its board is aware of an “adequate number of bidding interests” and will devise measures for enabling open bids in consultation with the Indian government and the Securities Exchange Board of India.
Earlier this month, Ramalinga Raju, chairman and founder of Satyam, revealed that he had falsified the company’s accounts and inflated cash and bank balances to the tune of about $1.4 billion. Since then, it has also been revealed that the company actually hired fewer employees than it claimed to, in an attempt to inflate the amount it paid out as remuneration to employees.
In response to the scandal, the Indian government has nominated a board of directors and Satyam is currently a government-administered company.