Have Plan B in Place: Forrester to Satyam Clients

by CXOtoday Staff    Apr 07, 2009

Lack of financial data and unknown legal liabilities of Satyam could see the deal falling through, said IT consultancy firm Forrester Research in a fresh advisory to the scam-tainted outsourcing company’s clients.

The government-appointed board of Satyam Computer Services is scheduled to open the financial bids on April 13.

In its advisory, the firm has advised Satyam’s clients to keep their alternative plan ready.

Forrester said the bidders won’t have access to the company’s full financial data, and the deal is happening under the shadow of risk of class action suits and litigation in the US as well as a series of financial and legal challenges in India.

Forrester said based on conversations with prospective bidders "we believe that some of the key bidders will exit discussions quickly".

The report, titled Satyam Uncertainty-Phase 2, further stated that to protect their own interests and ensure continuity of service, Satyam clients need to accelerate finalisation of their Plan B and keep a close watch on which firm buys Satyam to decide if and when to pull the trigger to shift to that Plan B.

Of the eight bidders in the fray, Larsen & Toubro and IBM continue to be the front-runners in the race to acquire 51% stake in Satyam.

 

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