Tech Mahindra Ltd. emerged as the
highest bidder for fraud-hit Indian IT outsourcer Satyam Computer Services Ltd. (NYSE:SAY). Tech Mahindra, which is jointly owned by Mahindra & Mahindra Ltd. and British Telecommunications plc, will buy a 31% stake in Satyam for $351 million.
The offer of 58 rupees ($1.17) per share is about a 10th of what Satyam shares were worth about a year ago. After chairman and founder Ramalinga Raju revealed an accounting fraud in January, shares traded under R10 per share. The New York Times noted
the offer topped bids from the Indian engineering firm Larsen & Toubro, which offered R49.50 per share and already owns a 12% stake in Satyam; and from American venture capital investor Wilbur Ross, who tried stealing it at R20 per share.
The global
bidding process was launched on March 6. An Economic Times article quoted Harshpati Singhania, president, Federation of Indian Chambers of Commerce and Industry, as saying, "This is probably one of the fastest cases where there has been a change in ownership through a structured process."
Tech Mahindra will make an offer for another 20% of Satyam in the open market. One industry expert said there is very little overlap between both the companies in terms of verticals which should
hasten the integration process. Anand Pathak, a partner at P&A Law Offices in New Delhi, was the lead lawyer counseling Tech Mahindra.
The deal offers some
much-needed relief for the IT giant's employees. Thousands had defected in the wake of the scandal for clients and other rivals. Earlier this month, Bank of America Corp. (NYSE:BAC) took on a
few hundred staffers that were working on a Merrill Lynch & Co. project. -
Baz HiralalGo to the NYT storySee the Economic Times' take
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And the winners are...
