Indian Giant Wipro Eyes Bid For UK Outsourcer

One of India's biggest outsourcing firms is mulling a takeover bid for Equiniti, the British-based group which manages the pensions of millions of UK civil servants.

Sky News understands that Wipro (BSE: WIPRO.BO - news) is among a clutch of prospective bidders which in recent weeks have lodged their potential interest in a takeover with Equiniti's owners.

Although it faces stiff competition from private equity buyers and a potential stock market listing, Wipro would - if it pursues its interest - be a credible contender to buy the company.

The Indian IT group has a market capitalisation on the Indian Stock Exchange equivalent to nearly £14bn, and employs nearly 160,000 people around the world, according to the company's website.

Wipro would be a logical buyer of Equiniti, which is one of the UK's biggest providers of business process outsourcing services, and which handled some aspects of Royal Mail (LSE: RMG.L - news) 's controversial £3.3bn privatisation in 2013.

A takeover of Equiniti by Wipro would be one of the largest Indian takeovers of a UK company; by value, it would trail deals such as Tata Motors' purchase of Jaguar Land Rover and Tata Steel (BSE: TATASTEEL.BO - news) 's acquisition of Corus, both of which took place nearly a decade ago.

Advent International, which bought Equiniti in 2007, is continuing to pursue a stock market listing of the company and has appointed Barclays (LSE: BARC.L - news) to work alongside Goldman Sachs (NYSE: GS-PB - news) and Rothschild on its options, banking sources said on Monday.

Other possible buyers include the Canadian pension fund Omers and the buyout firm Hellman & Friedman, they added.

Previously owned by Lloyds TSB, Equiniti counts more than half of the members of the FTSE-100, including HSBC, Marks & Spencer (Other OTC: MAKSF - news) and Shell (LSE: RDSB.L - news) , among its clients.

It was originally a registrar business focused on the administration and payment of shareholder dividends at companies such as Barclays and Tesco (Xetra: 852647 - news) , but has diversified into services including pension and benefits administration, and technology to support loan servicing and complaints-handling.

Equiniti's chief executive, Guy Wakeley, joined just over a year ago, replacing Wayne Story, who quit soon after Royal Mail's £3.3bn flotation - although the two events were not connected.

Equiniti describes itself as "the leading provider of shareholder services in the UK based on revenues and the number of underlying shareholder and employee records administered, providing services to more than 1,000 corporate clients and 17 million shareholders".

It boasts that its longest-standing client relationship has existed for 177 years.

The company has been acquisitive under Advent's ownership, with its most significant deal arguably taking place in October last year, when it took control of MyCSP, which administers civil service pensions.

Sources said that Equiniti could be worth well over £1bn when it is sold or floated.

Equiniti, which employs nearly 3000 people, declined to comment.