Saturday, May 19, 2007

Patni scrip surges on IBM buyout buzz

The share price of Patni Computer Systems has surged over 8 per cent in the last two days on market buzz that IBM is in talks to acquire around 25 per cent in the company.

With Patni’s market cap at Rs 7,211 crore on close of trading today, the acquisition could cost IBM around Rs 2,000 crore.

Some investors are planning to offload their stake in the company. If IBM buys 25 per cent, it will have to make an open offer for an additional 20 per cent stake as per the Takeover Code of the Securities and Exchange Board of India.

After closing at Rs 476.55 on the Bombay Stock Exchange on Wednesday, the Patni stock rose to Rs 513.90 on Friday.

At present, the company’s Indian promoters — Ashok Kumar Patni and Gajendra Kumar Patni – hold 11.31 per cent in the company, while foreign promoters—Isolutions and Narendra Kumar Patni — hold another 14.77 per cent.Narendra Kumar Patni, who is also the chairman of the company, owns 1.53 per cent of the company, while Isolutions owns 13.24 per cent.

Read more in The Business Standard article.

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