Sebi approves iGate’s Patni takeover deal

Sebi approves iGate’s Patni takeover deal

New Delhi: Market regulator Securities and Exchange Board of India (Sebi) has approved the $1.22 billion (more than Rs5,400 crore) takeover of India’s sixth largest IT firm Patni Computer by US-based iGate.

Sebi has issued final observations, made in an order dated 25 March on the deal which was awaiting regulatory nod for about two months.

Earlier, Sebi had sought reply from the Merchant Bankers (MB) - Kotak Mahindra Capital Company - of the deal on certain clarifications required for the clearance.

The open offer by the iGate was slated between 4 March and 23 March.

In January, US-based iGate-led consortium had clinched a deal to buy nearly 63% stake in India’s sixth largest IT firm Patni Computer Systems for about $921 million (Rs4,188 crore) after several rounds of negotiations.

The deal size, however, will go up to about $1.22 billion, after the acquisition of 20% from public shareholders at the same price of Rs503.50 a share through the mandatory open offer.

The aggregate price for the shares to be purchased in the open offer, assuming full tender, is estimated at $301 million.

Under the deal, iGate, in a consortium with private equity firm Apax Partners, will buy the entire 45.6% stake of Patni brothers - Narendra Patni, Ashok Patni and Gajendra Patni - along with General Atlantic’s 17.4% holding.