European IT giant Capgemini is mulling a bid to acquire Citi Group's India-based captive technology and infrastructure outsourcing division, Citi Technology Services (CTS). The US financial service major, which has put its IT infrastructure arm on block, "has approached two domestic and two global IT firms," an investment-banking source familiar with the negotiation said.
The other contenders include Wipro, TCS, and IBM. "Citi is approaching the contenders selectively. Capgemini is one of the firms that has been approached by the Citi management," he said.
When contacted a Citi Group spokesperson said, "As a policy, the group does not wish to comment on market speculations." Capgemini did not respond to an e-mail questionnaire seeking comments.
"They had decided to sell both the IT and BPO arms together. Later it was decided to sell them separately as a measure to get maximum valuation," the banker said.
Citi was looking at a valuation of around Rs 1,180 crore to Rs 1,416 crore ($250-300 million) for CTS. However, the bidders including the Indian and foreign firms have quoted a proposal somewhere between Rs 708 crore to Rs 878 crore ($150-186 million) for CTS, he said. CTS employs over 2,800 people at offices located in Mumbai and Chennai.
The company provides application development, maintenance and testing support for various financial services applications.
6 months ago