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Tuesday, April 14, 2009

Tech Mahindra acquires Satyam outbidding L&T

Tech Mahindra Chairman Anand Mahindra addresses a press conference called to announce the winning of the bid to buy Satyam Computer Services, in Mumbai on Monday.

MUMBAI: The beleaguered Satyam Computer Services has finally found a new owner, after its founder chairman, B. Ramalinga Raju left it in the lurch with his confession of corporate fraud in January this year.

Tech Mahindra pipped Larsen & Toubro and Wilbur Ross to the post and is set to initiate the takeover process pending the approval of the Company Law Board which should happen in a week.

The final act of the Satyam saga played out on Monday with the government-appointed board of directors selecting Venturbay Consultants Private Ltd., a subsidiary controlled by Tech Mahindra, as the highest bidder to acquire a controlling stake in the IT services company.

Share subscription

Upon being declared the highest bidder, Tech Mahindra and Satyam executed an agreement whereby Tech Mahindra agreed to subscribe to and acquire 30.28 crore shares of Satyam, representing 31 per cent of its share capital, at Rs. 58 a share. This will infuse Satyam with Rs. 1,756 crore. The subsequent open offer for 20 per cent, amounting to Rs. 1,132 crore, will result in a total of Rs. 2,889 crore coming into the company for the 51 per cent stake.

Addressing the media, Tech Mahindra Chairman Anand Mahindra said, “This is a landmark development for Tech Mahindra and I am delighted that we

are the highest bidder for Satyam.

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