Capgemini on Wipro radar?

BANGALORE: Earlier this year, there was talk in the European trading community about a takeover bid for Capgemini by Infosys Technologies. Now, it's 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 euro 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 completely irrelevant."
A Wipro spokesperson said, "We don't react to market 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."
He goes on to note, however, that the rumoured 60 euro a share price tag "would be quite expensive, valuing the group at around 8 billion euro, 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. But for a company like Wipro, Capgemini seems like a financially difficult proposition. It makes more sense for them to acquire a small to mid-size company," said Krupal Maniar, an analyst from 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. Headquartered in Paris, Capgemini operates in more than 30 countries and in areas like consulting, technology, outsourcing, and local professional services.
Wipro, India's third largest software company, posted total revenues of Rs 4,785 crore in the quarter ended September 30, 2007, a 35% growth against Rs 3,546 crore in the corresponding quarter last year. The company has so far made only small acquisitions around the world, to fill what it sees as gaps in its portfolio — a strategy that its promoter Azim Premji calls 'the string of pearls' strategy.