The Hindu Business Line : Satyam’s smaller businesses ‘still attractive’

Mumbai, Jan. 7 The sensational disclosures of Satyam’s Chairman Mr B. Ramalinga Raju could deter competitors and private equity firms from looking at the Hyderabad-based company as a target for acquisition.

But while Satyam may not seem attractive in its totality, it would still be of interest in parts, say merchant bankers.

By taking over the smaller businesses of Satyam that are doing well, a company interested in the acquisition would not have to take on Satyam’s liabilities on its own books, said Mr Amit Shah, Director & Chief Operating Officer at AvistaAdvisory Group.

In an economic environment such as this, nobody would want to acquire a company with liabilities on its books. And hence, majority of them would prefer taking over parts of Satyam’s (either IT, BPO or both), rather than taking over the entire company, said Mr Shah. If only its operations are acquired, Satyam would continue to be run as a separate company owned by current shareholders. They would then get cash from the acquirer to pay their liabilities, said Mr Shah.

Several IT firms would rather prefer to poach clients and employees from Satyam’s stable, according to IT industry officials.

The major assets in any IT company’s business are its people. And Satyam has a strong workforce which is good at what they do, that is providing IT & BPO services, said Mr R.S. Desikan, Chief Financial Officer of mid-size IT firm Mastek Ltd.

Sources indicate that companies such as Wipro and Infosys have already started making presentations to Satyam clients. GE, General Electric, Airbus, and so on, are some of the key customer accounts with Satyam.

Tech Mahindra interested

Telecom solutions provider Tech Mahindra said on Wednesday that it could consider taking over Satyam`s existing telecom contracts if the Hyderabad-based company’s clients asked for it, said Mr C.P. Gurnani, President-International Operations of Tech Mahindra.

Tech Mahindra is not averse to taking on board telecommunications related professionals from the embattled IT company that is still reeling from the disclosures of its promoter earlier in the day.