Fineprint holding up Patni stake sale announcement?
It could be a couple of days before a formal announcement is made about sell-off of Patni Computer Systems to Phaneesh Murthy-led iGATE-Apax.business Updated: Jan 09, 2011 21:49 IST
It could be a couple of days before a formal announcement is made about sell-off of Patni Computer Systems to Phaneesh Murthy-led iGATE-Apax.
The announcement could well be made on Monday, when the board of Patni Computer meets, but people familiar with the matter say a formal statement would come only after tax-related issues have been sorted out.
“The iGATE-Apax consortium has made changes in terms of the deal that proposes to address tax issues between the two parties,” an executive familiar with the developments said. He said changed terms mandate that after the deal, the Patni promoters will pay taxes both in India and the US.
The executive said iGATE is not paying a non-compete fee to the promoters either. Non-compete fee refers to money paid by a buyer entity to the seller promoters agreeing that they will not re-enter the business and pose competition to the acquired company.
iGate-Apax is expected to offer Patni Computer a price in the range of R500 to R550 per share, valuing the deal at around R4,500 crore. Patni shares were down 0.7% and closed at R460 on the Bombay Stock Exchange on Friday.
Spokespersons of both Patni Computer Systems and iGATE have refused to comment on the deal so far.
iGate-Apax had been competing with the consortium of private equity firm Carlyle-Advent and Vivek Paul, the former vice chairman of Wipro, in the Patni race. Carlyle-Advent reportedly opted out citing the high price quoted by Patni promoters leaving iGate-Apax as the sole bidder.
The Patni brothers, Ashok Kumar, Gajendra Kumar and Narendra Kumar own about 46% stake in the company.