Mumbai, April 13: Satyam today found a new owner in
industrial conglomerate Mahindras that outbid engineering
giant L&T with an offer of Rs 58 a share -- entailing up to Rs
2,900 crore for majority stake in the scam-tainted IT company.
Emerging victorious, Anand Mahindra-led group's IT arm
Tech Mahindra said it would fund the deal primarily through
debt and assured best of services to Vikram Pandit of
Citigroup, John Chambers of Cisco and other prized customers.
Having won the bid for 31 per cent stake, Tech Mahindra
would make an offer for an additional 20 per cent stake within
a week of getting clearances from Company Law Board, which had
in January allowed the government to appoint a board to run
the company thrown into crisis after its founder Ramalinga
Raju disclosed a Rs 7,800 crore fraud.
"The highest bidder is required to bring in Rs 1,756 crore
for 31 per cent... (and) would have to make the open offer for
20 per cent at the bid price of Rs 58 a share... that would be
Rs 2,889 crore," said Kiran Karnik, Chairman of the
Government-inducted board, announcing the outcome of the bids
where American-billionaire investor Wilbur Ross making the
third highest offer.
L&T, which had accumulated over 12 per cent stake in
Satyam ahead of the bid, said that it wasn't disappointed and
hoped that the new owner would add value for shareholders.
Investors gave a thumbs-up to Tech Mahindra with a 12 per
cent increase in share price to Rs 359.45, while Satyam shares
rose by about three per cent.
Victory of Tech Mahindra is the culmination of the high
drama of Satyam that started with the India's fourth largest
IT firm announcing 1.6 billion dollar acquisition of two
Maytas firms promoted by Raju's family and reversal of the
deal within 24 hours due to opposition from investors.
Within days, Raju disclosed of the fraud and is at the
centre of all investigations, including by CBI, and the
government-appointed board started the search for a strategic
partner to resurrect the company.
Even as the law takes its course against Raju and others
involved in the fraud, Tech Mahindra and Satyam would become
the fourth largest IT combine in India in terms of market
capitalisation after Infosys, TCS and Wipro.
The successful bid for Satyam is about one tenth of the
share price of Rs 542 that the IT firm commanded in May last
year and Tech Mahindra would get charge of over 48,000 strong
work force and an impressive clientele of the acquired company
to add to its own 24,000 software professionals.
As against Tech Mahindra's Rs 58 a share, L&T offered Rs
45.90 and Ross had made a bid of Rs 20 a share. L&T which
holds 12.04 per cent in Satyam said it won't sell the shares
and these are locked in for six months.
The acquisition would mark entry of Tech Mahindra, which
has been focussed on telecom space so far, into verticals like
financial services, healthcare and manufacturing.
"After we hear the decision of Company Law Board, we will work with Satyam's customers, business partners, employees and other stakeholders to restore confidence in the company," Vice Tech Mahindra Vice-Chairman and CEO Vineet Nayar said.
CLB has said it would respond within 24 hours of being approached by the Board of Satyam.
Tech Mahindra which bid through a 100 per cent subsidiary Venture Bay was advised by Kotak Investment Bank and UBS for the all-cash deal.
Mahindra said its bid of Rs 58 a share took into account all the legal liabilities and the offer was 'rational'.
Satyam shares today settled three per cent higher at Rs 48.85 after paring most of the intra-day gain of over 16 per cent.
Bureau Report