MUMBAI:
The Patni brothers are demanding higher premium for their stake in Patni
Computers Services than what is being sought by General Atlantic, the
second-largest shareholder in the company, two persons close to the matter
said.
A person privy to the development said the Patni brothers were of the opinion that their 48% stake should earn ???strategic premium??? compared with General Atlantic???s 18% stake.
???The Patni brothers ??? Narendra, Gajendra and Ashok ??? are asking for at least 25% premium over the market price, or Rs 600 a share, which values their stake at around Rs 3,700 crore. General Atlantic, on the other hand, is open to exiting even at around 10% premium to the market price. On Thursday, Patni shares closed at Rs 486.95 on BSE, putting the valuation of the company at Rs 6,248.50 crore. A banking source said Ambit is advising the Patni brothers on the sale. He also said that talks with potential buyers, including L&T Infotech, Japanese IT major and Fujitsu, are on.
The company???s performance has recently improved and in the past six months it has got 11 upgrades from brokerages. Its stock price has gone from a low of Rs 94 as on March 2, to a high of Rs 522.70 on Oct 30, 2009, a day before its September results announcement.
Patni CEO Jeya Kumar said the Patni brothers had clarified that they were not having any stake sale discussions. ???The Patni brothers have said they are not having any discussions regarding a stake sale and someday, if they decide to sell they will follow the process that has legally been laid down. GA invested seven years ago. As a PE firm ,their business model is to invest in firms and sell the investment for a profit. But none of the stakeholders have given any indication of when and how much stake they plan to sell,??? said Mr Kumar.
???People are talking to them (GA and the brothers) all the time. They cannot come to the board everytime someone approaches them,??? he added.
General Atlantic has been sounding out prospective investors for its 18%, but the response has been lukewarm. ???No strategic player will be interested in picking up only General Atlantic???s stake if the Patni brothers are still invested,??? a person close to the situation said. It will not give the buyer any benefits or powers.
A person close to one of the interested parties said the acquisition would be expensive as the acquirer would have to buy nearly 84% stake, including the mandatory 20% open offer. ???The problem is that you cannot buy only the promoters??? stake, and leave out General Atlantic. In that case, the private equity may sell its stake to a third party some time later, giving entry to a third party to the company which may not be welcomed by the acquirer.???
The large chunk of the stake, which is up for sale, is one of the stumbling blocks of the deal, he added.
A person privy to the development said the Patni brothers were of the opinion that their 48% stake should earn ???strategic premium??? compared with General Atlantic???s 18% stake.
???The Patni brothers ??? Narendra, Gajendra and Ashok ??? are asking for at least 25% premium over the market price, or Rs 600 a share, which values their stake at around Rs 3,700 crore. General Atlantic, on the other hand, is open to exiting even at around 10% premium to the market price. On Thursday, Patni shares closed at Rs 486.95 on BSE, putting the valuation of the company at Rs 6,248.50 crore. A banking source said Ambit is advising the Patni brothers on the sale. He also said that talks with potential buyers, including L&T Infotech, Japanese IT major and Fujitsu, are on.
The company???s performance has recently improved and in the past six months it has got 11 upgrades from brokerages. Its stock price has gone from a low of Rs 94 as on March 2, to a high of Rs 522.70 on Oct 30, 2009, a day before its September results announcement.
Patni CEO Jeya Kumar said the Patni brothers had clarified that they were not having any stake sale discussions. ???The Patni brothers have said they are not having any discussions regarding a stake sale and someday, if they decide to sell they will follow the process that has legally been laid down. GA invested seven years ago. As a PE firm ,their business model is to invest in firms and sell the investment for a profit. But none of the stakeholders have given any indication of when and how much stake they plan to sell,??? said Mr Kumar.
???People are talking to them (GA and the brothers) all the time. They cannot come to the board everytime someone approaches them,??? he added.
General Atlantic has been sounding out prospective investors for its 18%, but the response has been lukewarm. ???No strategic player will be interested in picking up only General Atlantic???s stake if the Patni brothers are still invested,??? a person close to the situation said. It will not give the buyer any benefits or powers.
A person close to one of the interested parties said the acquisition would be expensive as the acquirer would have to buy nearly 84% stake, including the mandatory 20% open offer. ???The problem is that you cannot buy only the promoters??? stake, and leave out General Atlantic. In that case, the private equity may sell its stake to a third party some time later, giving entry to a third party to the company which may not be welcomed by the acquirer.???
The large chunk of the stake, which is up for sale, is one of the stumbling blocks of the deal, he added.
