Software group's $351 million bid selected, ending months-long suitor search
Venturbay Consultants Pvt. Ltd., a unit of Tech Mahindra, will pay 17.6 billion rupees ($351 million) for 302.76 million Satyam .The 58-rupee-a-share-offer is a 23% premium to Satyam's closing price of April 9.
The decision ends a prolonged search to select a strategic investor for Satyam. It comes three months after former Chairman B. Ramalinga Raju unveiled the bombshell that prompted India's largest corporate-account fraud inquiry.
The selection process, overseen by a retired lawmaker, approved the Tech Mahindra bid outright after the nearest competing bid was found to be less than 90% in value.
The selection rules had stipulated that an open auction would take place if a number of competition bids, close in value, were received.
Satyam's board, made of government appointees, will recommend the Tech Mahindra bid for approval.
Tech Mahindra said Monday in a statement to the Bombay Stock Exchange that its unit had been selected by Satyam.
Larsen & Toubro Ltd., which holds a 12% stake in Satyam, said its has no intention of selling its stake at this time, the company's chief financial officer was cited as saying to a business news channel. The company had been seen as a leading contender for the Satyam stake.
Satyam, once India's fourth-largest software exporter by revenue, has been in turmoil since founder Raju said in January that the company's accounts had been overstated for years and had a fictitious cash balance of more than $1 billion.
Shares of Satyam ended 3.6% higher at 48.85 rupees in Mumbai trading Monday.
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