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back to article Wipro seeks firepower for Capgemini bid

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" 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 …

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  1. Matt Bryant Silver badge
    Stop

    Oops!

    So it will be another case where the buyer will over-extend themselves to make the purchase of a company in need of investment, and then be forced to make massive "rationalisations/optimistaions/cost-savings/guana-guana-phrase-of-the-day" to try and claw back some money to meet the interest charges and keep their own share price from nose-diving. End result - things just get worse and there is no real benefit from the purchase in the first place. If Wipro can't afford it they shouldn't buy, it will be less painful for all involved. IMHO, unless Wipro intend on buying to asset strip, they could choose a dozen better targets in the UK alone.

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  2. Mark

    Ahhhh but...

    WIPRO just need the name, they can stuff as many underpaid (by western standards) Indian devs/testers as they like into crap... erm cap gemini as they like. WIPRO is a outsourcing powerhouse but they do not win many tenders from western governments, most of thier work comes about from outsourcing done by the comanies who do win the teders.

    This purchase would give them a foot in the door with more lucrative contracts which is what they need right now to move forward.

    Put simply, the monkey is buying out the organ grinder so he can have all his perks.

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  3. Anonymous Coward
    Flame

    How better to get the "right shoring" message palatable?

    So there's ASPIRE the largest government outsource ever manage; A group of civil servants that were outsourced to EDS and then on to CG; Clearly the only way to remove these "highly-motivated" staff who are waiting for their fat pensions and move the work to India, is for WIPRO to buy the contract, then everyone works for India!

    Everyone's happy? The least productive unionised workers will get a fat payoff, the government gets lower cost workers from India to do better work, the big knobs in Paris can get their restructured share options cashed in... everyone. Except of course the tax payer who will be face with the usual appalling service that all off shored development provides - it's not cultural it's practical: dealing with project teams that are miles and hours apart is so inefficient.

    Hey that myth will keep running I guess!

    Finally, the big knobs in Paris are actually unlikely to agree, life is way to easy, some of them have been with the company since it started, they're egos are caught up in it and so unless WIPRO wanna pay way over the odds (like CG did for E&Y consulting), it ain't gonna happen.

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