IBM is contender in Satyam buyout
Report reveals eight companies have been shortlisted to buy 51% stake in ailing outsourcer
IBM is one of the eight companies that have been shortlisted to acquire a 51% stake in ailing Indian outsourcer Satyam, the Economic Times has reported.
Registering its interest through a law firm, IBM joins others in the running including Apax Partners, Larsen & Toubro, Tech Mahindra and Spice Group.
Satyam hopes to finalise a buyer by April 30 but, despite efforts to press ahead, can’t escape the negative aftermath of its fraud scandal. Investigators now believe the amount of misreported funds is much higher than the $1 billion that chairman Ramalinga Raju confessed to, and is instead closer to $2 billion.
In another twist, Spice Group chairman B.K. Modi is now hinting at withdrawing its bid ‘due to a lack of desired transparency in the bidding process’.
"We wanted transparency, which we have not got. We don't know who the other bidders are. There is no understanding of (a) clear-cut auction process," Modi told Reuters by telephone on Wednesday.
Though IBM has not officially confirmed its interest in Satyam, its entry could give serious competition to Indian engineering firm, Larsen & Toubro which has so far been seen as the strongest contender.
News of IBM making the shortlist comes just as it announced plans to lay off an additional 5,000 US employees and shift more work to India. It's also recently rumoured to be in takeover talks with Sun Microsystems in a deal worth $6.5 billion.