Blackstone, Genpact bid for WNS stake

[jayanthi mandhalapu]

The world's biggest buyout firm Blackstone and back-office company Genpact have bid for a controlling stake held by Warburg Pincus in WNSGlobal Services, two people familiar with the development said. Warburg Pincus is likely to decide on the stake sale next week, they said preferring to be anonymous. A WNS spokesperson declined to comment on the two specific bids. WNS, on August 7, said: "We have received expressions of interest from various interested parties." The bids may be around $300 million for a 50.1% stake, against Warburg's expectation of at least $400 million, they said.

Warburg, which considered selling the stake after private equity firms such as Apax Partners and Bain Capital approached it may decide against selling the stake, if it is not satisfied with the offer. Blackstone has put in a cash bid, a source said, adding he was unaware of the nature of Genpact's bid. For Blackstone, the acquisition of WNS will help it increase revenues from back-office operations in India, as it already owns a stake in a similar company. Blackstone bought 80% stake in Intelenet Global Services in 2007, which does back-office work for banks such as UK's Barclays.

Genpact is also keen on the deal since the acquisition will reduce its dependency on General Electric (GE) for revenues. GE contributes 40% to Genpact's revenues. Many potential investors, such as Apax and Bain, pulled out after a surge in the stock price of WNS once the intention of stake sale became public. "The stock has rose almost 35% since the news of Warburg's intention to exit became public," said a fund manager at a PE firm.

The successful bidder will also have to make an open offer, which will involve further cash outgo," said a fund manager at a PE firm, who did not want to be identified.