Employees of Satyam sit inside an office vehicle in Hyderabad on Tuesday. (Reuters)

Mumbai, Dec. 30: US-headquartered Cognizant Technologies is the most likely contender out of the software pack to bid for Satyam Computer Services.

Among the big IT players, analysts say Cognizant is likely to gain the most if it acquires Satyam as the deal will give it scale, an opportunity to diversify from concentrations such as banking, financial services and pharmaceuticals and access to a robust SAP business.

A Cognizant spokesperson in Chennai said, “We don’t comment on market speculation.”

Big private equity players such as Carlyle are also circling Satyam. However, a transaction is unlikely in the next few months. “All the big firms have an interest in Satyam but it is unlikely that anyone will do a deal at the current six-month average price of Rs 350 a share, which is the rule for open offers. It’s more prudent to wait for another 3-4 months till the price comes down to Rs 175,” said a private equity executive.

The PE players are also apprehensive about the Upaid imbroglio. British telecom services company Upaid Systems is engaged in a legal tussle with Satyam on alleged fraud and a breach of contract.

Whether it is a PE firm or a software company that eventually gains control of Satyam, the potential buyer will have to approach institutional investors before it can hope to wrap up a deal. The institutions own over 61 per cent. In contrast, the promoters — the Rajus — hold less than 4 per cent. Some suggested that it might even be lower after the lenders started selling the stock.

According to an international brokerage, “Satyam sources tell us Raju is warming up to exit Satyam but any action needs to happen from outside and minority investors will have to come up with alternative management plans.”

There were several unconfirmed reports about how much the promoter’s stake had fallen from the level of 8.6 per cent that the company reported to the bourses on September 30. However, it is clear that Rajus’ stake is still above 2 per cent as it is mandatory to make a disclosure otherwise.

Merrill Lynch, which has been appointed by the Satyam board to devise ways to improve shareholder value, is also likely to call for bids. According to the communication, “The mandate given by Satyam to an investment bank is very broad, with a primary focus on getting an external investor who might not necessarily be amenable to the Rajus.”

The Satyam board, on its part, can legally meet and transact business for another 180 days. According to regulations, 50 per cent of the board need to consist of independent directors. After Monday’s resignations, the company still has two independent directors out of the five on the board. The company will have to fill up the vacant positions within the next 180 days. Since the board originally had nine members, it could still function with a quorum of three directors under the rules.

This means that Ramalinga Raju will continue to manage the company in the forthcoming months despite a fall in the shareholding of the promoter family.