iGate makes open offer for 20.6 per cent stake in Patni Computers
11 Jan 2011
US-based iGate, which on Monday struck a deal to acquire Patni Computer Systems (See: iGate pays $1.22 billion for 63 per cent Patni stake), today made an open offer for a 20.6 per cent stake in the company, in line with the regulatory requirements.
The open offer – from 4 March to 23 March – will see iGate buy an additional 20.6-per cent stake at a price of Rs503.5 a share. The Patni scrip was trading around Rs450 on the Bombay Stock Exchange on Tuesday around 1 pm, nearly three per cent lower than the opening price.
iGate, which was promoted by former top Infosys executive Phaneesh Murthy, will end up paying about $1.22 billion for an 83.6 per cent stake in Patni Computers. It signed a deal on Monday to acquire a 63 per cent stake from the promoter family – which includes the three Patni brothers – for $921 million.
The deal, one of the largest in the Indian IT sector, is expected to be wrapped up by the middle of this year. iGate has got the backing of private equity firms such as Apax Partners and General Atlantic for funding the acquisition.
California-based iGate has been on the lookout for Indian IT players. It had initially decided to bid for Satyam Computers in 2009, but backed out later (See: iGate opts out of Satyam bid).
Patni reported revenues of nearly $520 million for the nine-month period ending September 30, 2010, whereas iGate saw revenues of less than $200 million. The new entity, expected to operate under the iGate brand, will see combined revenues exceeding $1 billion and a combined employee base of nearly 25,000.
