Tech Mahindra wins Satyam Bids @ Rs.58 Per Share against L&T
How Tech Mahindra won the Satyam bid
April 13, 2009
Ending the three-month ordeal of about 50,000 employees, Tech Mahindra on Monday emerged as a top bidder with an offer of Rs 58 a share for a 31 per cent stake in beleaguered Satyam Computer, beating a strong rival Larsen & Toubro
Tech Mahindra would acquire the stake in an all-cash deal, followed by an open offer for a 20 per cent stake to take management control of the company.
No immediate comment could be obtained from either Tech Mahindra or L&T.
After evaluating the bids, the government-appointed board of Satyam Computer on Monday announced that “its board of directors has selected Venturbay Consultants Private Limited, a subsidiary controlled by Tech Mahindra Limited as the highest bidder to acquire a controlling stake in the company, subject to the approval of the Company Law Board.”
atyam’s new board of directors, which met here to select the highest bidder, chose Tech Mahindra following its bid of Rs 1,757 crore ($351.4 million) for 31 per cent stake in the scam-tainted IT giant.
Tech Mahindra offered Rs 58 for each Satyam share.
L&T out of race for Satyam
The board will now have to inform the Company Law Board (CLB) of its selection. The CLB will announce its approval, within a week. The new owner will take over the management only after CLB’s nod.
Engineering major Larsen and Toubro (L&T) and private-equity firm WL Ross were among the other major contenders for the Hyderabad-based Satyam.
Satyam saga that raised several questions
L&T already holds 12.04 per cent stake in Satyam.
More India business stories | Get the latest Sensex update
The six-member Satyam board is headed by Kiran Karnik, former president of the National Association of Software and Services Companies.
Technology Slideshows | More technology news
Besides Karnik, the board comprises the HDFC Chairman, Deepak Parekh; former Securities and Exchange Board of India (SEBI) member C. Achuthan; and Confederation of Indian Industry (CII) mentor Tarun Das.
The company was administered by a new board appointed pursuant to the orders of the CLB dated January 9, 2009. The process to select a strategic investor has reached this significant stage within three months of the new board’s first meeting.
“On behalf of all Satyamites and their families, we congratulate Tech Mahindra on being the highest bidder. The selection of the highest bidder, in a fair, open and transparent process, signals a new stage for the company in its progress towards stabilisation and growth,” Satyam said in an announcement.
The CLB said that the winning bidder will submit an affidavit by Thursday and the CLB will respond within 24 hours of the submission.
“We hope this (Monday’s announcement) will infuse greater confidence and comfort amongst customers, who continue to be happy with Satyam’s excellent service delivery. This event ought to dispel the anxiety of all stakeholders as it re-positions the Company’s commitment to revival and good governance,” said Kiran Karnik, chairman of the Satyam board.
The Satyam board selected Tech Mahindra through a global competitive bidding process launched by the Company on March 9, 2009, which was designed in accordance with the orders of the Company Law Board, approved by the Securities Exchange Board of India and conducted under the supervision of Justice Bharucha.
Pursuant to the bidding process, on April 13, 2009, bidders submitted their technical and financial bids. The Board under the supervision of Justice Bharucha first evaluated technical bids based on predetermined criteria submitted by three bidders, previously notified to the bidders.
The technical criteria covered information on the bidder, its promoters’ (if any) and persons acting in concert. The technical criteria included:
Corporate governance and management track record;
Corporate behaviour record, including corporate social responsibility policies and information pertaining to past conduct in
companies managed by the bidder;
Organizational ability and experience in owning, operating and managing information technology companies, global companies of
the scale and scope of the company and distressed companies;
Track record in managing distressed companies;
Revenues and profitability from Indian and overseas operations; and
Strategic plan for the company.
Related posts:
