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Patni deal soon, Apax front-runner

business Updated: Sep 03, 2007 23:18 IST

Private equity firms like Apax Partners, Tech Pacific and Blackstone are considering another round of due diligence for acquiring Chairman and CEO Narendra Patni's stake in Patni Computer Systems. Patni holds 14.97 per cent stake in the Mumbai-based software exporter.

The stake sale in the company has been stuck over the issue of management control with private equity players seeking full management control. The fresh negotiations are set to begin on September 10 and a deal could well be announced in a few weeks.

A Patni spokesperson, however, said, "We have not received any intimation and cannot comment on speculation."

It has been reported earlier that General Atlantic Partners was keen to sell off its 16.38 per cent in the company. Investment banking sources also indicated that the other two Patni brothers, who jointly hold about 29 per cent in the company, were reportedly interested in selling a 'substantial' part of their stake.

However, any stake sale by the family can be possible only after Narendra Patni's consent since he has the first right of refusal. Sources said that even if Patni does agree to a stake sale by his brothers, he is unwilling to give up control over the company.

"The deal is being valued at Rs 650-710 per share and that is a premium," said a source close to the development. The company's share price has jumped 22 per cent in a month and up from a 52-week low of Rs 352 on August 17 to 535 on Monday on the Bombay Stock Exchange.
An analyst with a Mumbai-based brokerage house said: "The big question is will a private equity player pay such a premium without management control."