The Satyam board meet is underway in Mumbai. This comes after L&T, Tech Mahindra and the Spice group filed expressions of interest (EOI) and i-Gate pulled out of the race on Friday (See: iGate opts out of Satyam bid)
Eight to nine bidders have shown interest in Satyam and that would be narrowed down to a couple of less numbers. Sources tell us that the board is currently trying to short-list from amongst the various EOIs.
There is another criteria apart from the price - the technical criteria, hence, the decision is not entirely based on price. The intention of the board is not to sell Satyam entirely as a piece and not have any concern for its future. They do want to keep Satyam as a going concern that is what the
Therefore, the short-listing of the bidders will not happen only on the basis of the highest bid, but also on the technical criteria; the kind of management expertise that they bring to the table.
Sources also tell us that the final bids which are put into place and if the difference between the highest bid and the second highest bid is around 10%, then there could be bidding between those two bidders to try and get a sense of the best possible price.
The Satyam board faces two choices and has to balance those in two ways - one is, if they go ahead with the entire bidding process before the restatement comes in, the bidders will have to factor that risk in. They will therefore not be able to pay the best price for Satyam, which is possible.
But, if the board does wait for the entire restatement of account and delays the process, which they have chosen not do, then they run the risk of turning away clients and client attrition. Clients want to stay with Satyam only if it has a long-term future and not if this kind of uncertainty continues.
Therefore, hopefully, the Satyam stake sale process should conclude very soon. The time bound nature of this entire process is very prevalent on the board because even the bidders don't want some Rs 1,500 crore of their money lying ideal, earning no interest and with no certainty whether they will win Satyam or not.