Satyam in spotlight for a possible takeover

[dwarakesh]

Satyam Computer is understood to have grabbed the attention of private equity investors, rival IT firms and other institutional investors, which are looking at the IT major as a possible takeover target with attractive valuations.

"The threat is looming large on the company. With such attractive valuations, anybody can come in to take a substantial stake, besides institutional investors, who would like to hike their stake," brokerage firm Ashika Stock Brokers Research Head Paras Bothra said.

Marketmen say speculation is rife that IT firms including IBM and Cognizant were looking to acquire Satyam.

However, IBM and Cognizant declined to comment. "Private equity investors may bid for the company. As valuations are rightly placed and promoters not holding a substantial stake at present, Raju may be forced to give up management control," Bothra added.

Satyam, which had plunged by nearly half in about two weeks after the Maytas fiasco, recovered some ground in three straight trading sessions.

The scrip settled with an 8.33 per cent gain on the bourses at Rs 162.45 and in three days it went up 20 per cent on the BSE.

Marketmen said with investors looking for efficient people taking charge of the management of the firm, they would accept somebody with knowledge and expertise in handling the business, and hence the probability of an IT firm taking over cannot be ruled out.

"The company is already a sitting duck. With a large number of shares changing hands at the counter, there are speculations about an imminent change in management," Kejriwal Research and Investment Services MD Arun Kejriwal said.

Satyam continued to remain the top traded counter on the exchange with nearly six crore shares getting traded.