Ending the three-month ordeal of about 50,000 employees, Tech Mahindra on Monday emerged as a top bidder for a 31% stake in beleaguered Satyam Computers, beating a strong rival L&T.
Tech Mahindra will pay Rs 1757cr for 31% stake in Satyam. It will pay Rs 58 per share of the company. Engineering firm L&T reportedly made an offer of around Rs 49 for each Satyam share. The face value of Satyam shares is Rs 2 per share.
Tech Mahindra would acquire the stake in an all-cash deal, followed by an open offer for a 20% 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.”
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 stabilization 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 (today’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, the chairman of the board.
The 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 CLB, approved by the Securities and Exchange Board of India and conducted under the supervision of former Chief Justice of India S P Bharucha.
The bidders submitted their technical and financial bids. The board, under the supervision of justice Bharucha, evaluated the technical bids submitted by three bidders.
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, organisational ability and experience in owning, operating and managing IT companies among others.