Tech Mahindra bags Satyam for Rs 1,756 cr

Mumbai: Tech Mahindra on Monday, emerged the highest bidder to acquire Satyam Computer and will pay Rs 1,756 crore to buy a 31 per cent stake in the company.
The telecom software major has paid Rs 58 for a 10-rupee share for subscribing to 30.27 crore shares of the fraud-hit IT company, representing a 31 per cent stake of the total share capital.
"Pursuant to the Share Subscription Agreement, Tech Mahindra has agreed to subscribe to and acquire 30.27 crore shares at Rs 58 per share thereby agreeing to infuse Rs 1,756 crore (USD 351 million)," a Satyam statement said.
Mumbai-based Tech Mahindra, where Mahindra and Mahindra is a promoter with a majority stake and BT has 30 per cent, is a key player in telecom software.
Commenting on the development, Tech Mahindra said its subsidiary Venturebay Consultants has emerged as the highest bidder to acquire a controlling stake in Satyam subject to the approval of the Company Law Board.
Tech Mahindra's share was quoting 12.61 per cent up on the bourses at Rs 360.40.
After getting CLB approval, Satyam Computer will ask Tech Mahindra to make an open offer for another 20 per cent in the company, which if fully subscribed in the first round, will take its stake to 51 per cent. If not subscribed fully by the existing shareholders, there could be a second round of open offer.
Tech Mahindra is required to deposit the Initial Subscription Amount and the requisite escrow amounts for the Public Offer on or before April 21, 2009.
If Tech Mahindra desires to take control of the affairs of the company simultaneously with the Preferential Allotment, it will be required to deposit in escrow the total funds necessary to consummate the Public Offer, Satyam said.
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.