Original URL: http://www.channelregister.co.uk/2007/12/24/wipro_preps_capgemini_bid/
Wipro seeks firepower for Capgemini bid
'Hectic negotiations' with bankers
Posted in IT Channel, 24th December 2007 19:57 GMT
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Capgemini shares moved up 11 per cent today on reports that Wipro, the Indian IT services giant, wants to buy the company.
Wipro is in "hectic negotiations [1]" with bankers over financing a deal which would value Capgemini up to $7bn, the Hindustan Times reports. A bid for the French IT services firm is expected by the end of January, the paper says.
Now for the caveats. A $7bn valuation pans out a €48 a share, a nice premium on today's closing price of €45. But as Jonathan Crozier, an analyst with WestLB in London, told Bloomberg [2], Capgemini shares traded at €59 in April this year, so "48 euros looks a bit opportunistic". Quite.
And, as the Hindustan Times notes, Wipro may find it difficult to raise funds in the wake of America's credit-crunching sub prime loan debacle. ®