iGATE Pulls Out of Race to Acquire Satyam
With Satyam’s financial statement still not available and government yet to cap its liabilities, iGATE has all but given up its interest in buying stake in Satyam. The new Satyam board has thus far only appointed a new CEO and CFO.
The company had earlier said it was waiting for the new financial statement before deciding its next step, as the Satyam board had ruled out any part buy option.
Talking to CXOtoday, Phaneesh Murthy. CEO of iGATE, said, "Our interest in Satyam is weaning now. If a portion of the company is not being sold, then it does not attract me."
Over the last few weeks, reports indicate that Satyam has lost several of its top employees and many clients are also moving away, thereby making the value proposition no longer interesting for iGATE. "I believe that delay in decisions will erode the value of the company because of migration of customers and employees," said Murthy.
It is believed that iGATE was keenly looking at acquiring the manufacturing and EPR verticals of Satyam that were dominant over the years. But with the board not likely to issue Satyam’s financial restatement in the near future, many of the other suitors are likely to pull out as well.
iGATE was among the early prospects, along with Larson & Turbo (L&T) and Essar, to express interest in acquiring the fourth largest software service provider. Since then the board has received three Expressions of Interest (EoI) from Mahindra Group, Hindujas and Spice Communications.
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