The Indian Economic Times (ET) has reported that Blackstone Group has dropped out of the race to acquire Serco India BPO, due to the asking price being too high.

Blackstone was previously thought to be the most likely candidate to buy Serco India BPO, having previously owned the business from 2007 until 2011. However, the private equity firm has now allegedly joined a number of other companies in thinking that the price set by Serco Group for the BPO business is simply too much.

Many believe that, having bought the business from Blackstone for over $630 million, Serco is unwilling to sell it back for as little as $400 million, despite that being the current estimated value of the business.

A source “familiar with the matter” told the ET: "They [Serco] don't want to take the hit, but the fact is that the business is just not as valuable. The business is less robust than when Serco bought it and the margins fluctuate. Other European private equity players have also looked at it and backed off.”

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