Earlier this year, there was talk in the European trading community about a takeover bid for Capgemini by Infosys Technologies. Now, its Wipro that's rumoured to be bidding for the French computer consultancy group.
Capgemini's share prices rose as much as 3.7% to about 44 euros in morning trade on Friday on France's CAC, following speculation that Wipro is mulling a 60 per share bid for the IT consultancy firm.
When contacted, Capgemini group press relations manager Christel Lerouge dismissed the rumour: "This rumour, as with other recent rumours, is irrelevant." A Wipro spokesperson said, "We don't react to ma rket speculation".
One international media house quoted a trader at a leading US brokerage as saying: "Wipro has been known to be open to inorganic growth. However, that the rumoured 60 a share price tag would be quite expensive, valuing the group at around 8 billion euros, but not impossible for Wipro. He is also quoted as saying Capgemini would provide a good hedge for Wipro. Some other analysts doubt there's any merit in the rumour. Since Capgemini deals with high-end consultancy, a lot of IT majors are eying the company.
For Wipro, Capgemini seems like a financially difficult proposition. It makes sense for them to acquire a small to mid-size company, said Krupal Maniar, an analyst at ICICI Securities. Capgemini will pose challenges for Wipro, both financially as well as for integration. Capgemini has been the subject of takeover rumours for a while.
The company has revamped its business in the past few years on the back of competition largely from Indian competitors. It has been active in the Indian IT service market too. Last year it bought IT services company Kanbay for $1.25 billion. It also acquired Indigo, the captive BPO arm of Unilever India.
Capgemini operates in more than 30 countries and in areas like consulting, technology, outsourcing, and local services.
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