India's leading conglomerates Mahindra Group and Larsen & Toubro Ltd. are contemplating to acquire Chennai-based Polaris Financial Technology's IT services unit. In 2009, these two software giants earlier fought to acquire Hyderabad-based Satyam Computers, reports said.
L&T Infotech has placed a $330-million offer, while Tech Mahindra's bid is more than $350 million. Both the offers, however, have come below the asking valuation of $400-450 million, sources said.
The other contenders for Polaris are Bengaluru-based Wipro and Infosys, after founder Arun Jain and an affiliate of Citigroup, which holds around 20 percent stake, decided to sell the IT services business that accounts for more than 70 percent of the company's income.
Axis Capital is organizing the sale process, which could be closed by next month.
The bidders are currently going through the vendor due diligence reports. All the four bidders have the option to raise their bids in the coming weeks. Citigroup, which is the biggest client of Polaris, will have a say in the sale process.
For L&T, Polaris presents an opportunity to scale up its IT business after it lost Satyam to the Mahindra Group four years ago. L&T is aiming at an annual revenue of $2-3 billion from its infotech arm. And Tech Mahindra is looking to boost its revenue from financial services clients and hence eyeing Polaris' unit.
Polaris, the 11th largest software exporter from India, recently split its businesses into two units, services and products to facilitate value unlocking in the enterprise.
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