Satyam to announce buyer on Monday

Troubled IT service provider Satyam is about to announce the name of its buyer with a 99% chance of an announcement on Monday.

Troubled IT service provider Satyam is about to announce the name of its buyer with a 99% chance of an announcement on Monday.

A company spokesman said there will almost certainly be an announcement regarding its acquisition.

The company has been up for sale since the Indian government appointed a board to stabilise Satyam after its former chairman admitted to cooking the books.

Bidders said to have shown interested in buying Satyam include western IT firms such as IBM, Hewlett-Packard and CSC, as well as Indian companies such as engineering firm Larsen & Toubro (L&T), IT services firm Tech Mahindra, and Spice Group, a diversified conglomerate. More recently BRO services supplier Cognizant has been linked with a late bid.

Phil Morris, managing director Europe at sourcing consultancy Equaterra, said it is very important that the company gets the takeover sorted out as soon as possible. "It is very important to end the uncertainty for their customers and their staff."

He said the staff are very important to the company, and that continued uncertainty could lead to key delivery workers leaving.

He said it is likely an Indian firm will buy Satyam.

Robert Morgan, director at Hamilton Bailey, which advices outsourcing suppliers, said that the new owner will have its work cut out reassuring customers that they should remain with Satyam after contracts come up for renewal.

"I think a big Western supplier would be best placed to do this, but my feeling now is that an Indian company will take over Satyam."

The bidding process for the company started on 9 March, with applications of interest requested to be in by 12 March. The company then required more detailed expressions of interest and proof from bidders of available funds to the value of $290m by 20 March.

Ramalinga Raju admitted in January that he had falsely reported the company's results for years. This left the company short of cash, its customers short of confidence and staff morale low.

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