Patni denies differences in family over stake sale issue

The stake sale buzz in Patni has picked up again­­--two years after it first surfaced and died a quiet death. Sources tell CNBC-TV18 that two of the three promoters of Patni have no intention of selling their stake yet.

CNBC-TV18 contacted the company for their version and they said that they denied it very clearly and has confirmed that these are nothing but baseless rumours.

Here is a verbatim transcript of Kenan Machado’s comments on CNBC-TV18. Also watch the accompanying video.

We have heard from our sources that two brothers-- Ashok and Gajendra Patni--do not have a clear intention, as of now, to sell out their stake. Together the three brothers and the promoters of Patni own about 49% in the company.

The sources closed to the family of Ashok and Gajendra Patni told CNBC-TV18 that General Atlantic, which owns about 16% in Patni, may have been approached by private equity and IT companies for a stake by General Atlantic which in turn may have approached these two brothers to club their stake together. This is because once this 16% of General Atlantic and the 33% that the other two brothers own is put up on the block the stake entirely would command a better premium. It would constitute a controlling stake in the company and once any investor makes an open offer he will fully control the company, and therefore, this premium would be something which General Atlantic would not otherwise have got.

We had contacted the company for their version and they said that the company denies this very clearly and has confirmed that these are nothing but baseless rumours.

We still do not know whether Narendra Patni intends to sell out or not. But if he does plan to increase his stake, both analyst and investment bankers say that won’t be possible and that would be a very tough call to make because of the kind of investments Narendra Patni would have to make to increase his stake in the company.  

On Patni’s acquisition plans:  

We have heard from sources that Patni may have identified two companies based in the US for a potential acquisition. Each of these companies revenues range between USD 200-400 million and this transaction could be consummated in the next couple of weeks subject to due diligence and subject to other M&A activities altogether.

One of the companies identified was in the SAP space and Patni is most likely to use some USD 300 million cash that it has for these acquisitions.