U.S. outsourcer iGate Corp said any bid it makes for Satyam Computer Services Ltd would be well below the current market price given uncertainty about the fraud-hit Indian firm's accounts and liabilities.
iGate has tied up with a private equity firm to bid for Satyam, whose government-appointed board is looking for an investor to help restore the confidence of clients and staff.
"We have a very strong private equity partner. Having said that, we still have to understand the financials to be able to figure out what we are going to bid," Phaneesh Murthy told Reuters in a phone interview on Monday.
"We know for a fact that we do not see our bid ... coming anywhere near the current share price of 90 cents."
Shares in Satyam fell 0.6 percent to 45.25 rupees (88 cents) in a Mumbai market that rose 2 percent on Monday, giving it a market value of about $600 million compared with the $7 billion it was worth last May.
iGate is among a clutch of firms that have expressed interest in Satyam, which has been battling for survival since its founder and Chairman Ramalinga Raju quit on Jan. 7 saying profits had been overstated for years and assets falsified.
New York-listed Satyam said on Friday that Indian and international firms, including private equity companies, had registered to bid for a controlling stake.
Indian engineering firm Larsen & Toubro, software services firm Tech Mahindra and diversified Spice Group are among those registered as potential bidders, who must submit detailed expressions of interest by March 20.
The massive plunge in Satyam's share price and a client base that includes General Electric and Qantas Airways are key attractions, but bidders face a tough job in valuing the outsourcing firm without restated accounts and given liabilities including U.S. class action lawsuits.
"I think it's a big struggle for any public company to bid for this company," Murthy told television channel CNBC TV18.
"Therefore, while I think now there are multiple players in the fray I do believe that... the number of players is going to come down dramatically very, very soon."
Two investment banking sources told Reuters on Friday around eight potential suitors had registered to bid for a 51 percent stake. Satyam said it had received an adequate response, but did not name or number the bidders.
Murthy said iGate had asked Satyam's board for access to January and February accounts and management's estimate for 2009 revenues, failing which it would drop out of the race.
"That will tell me how many customers are leaving and all that kind of stuff. We have some market intelligence but I want to cross-verify it," he said.