New Satyam owner to be decided today
13 Apr 2009
The bidding process for Satyam Computer Services Ltd has started on Monday morning, with the expected quartet - Larsen & Toubro, Tech Mahindra, the US-based Cognizant Technologies, and the Wilbur Ross-controlled W L Ross & Co having submitted their bids.
The technical bids would be examined first, and all the proceedings are being recorded on camera. The government-appointed board of Satyam is expected to select the highest bidder for the scam-hit company on Monday itself. Corporate affairs minister Prem Chand Gupta is expected make the formal announcement of the winning bid later.
According to a PTI report, Cognizant, which was expected to bid in tandem with W L Ross, has also failed to submit a bid. Spice Corp, IBM and iGate are among those who dropped out of the race earlier showing an interest in the company.
iGate decided to drop out of the race citing concerns on falling revenues and not enough clarity on customers and margins, while Spice Group claimed that the bidding process lacked transparency. IBM is believed to have pulled out on concerns of the extent of liabilities in US, where Satyam is also a listed firm.
The bids received by the board are likely to be between Rs55-Rs65 per share, reports CNBC-TV18 quoting NW18 sources. The bidders have submitted two envelopes; one a technical bid and the second a financial bid. Only if a bidder clears the technical aspect will the board open the financial bid. In case of a 10-per cent differential between one or more bids and the highest bid, an open auction would be triggered.
"We have entered the final stage of the bidding process, and on Monday we will conduct the financial bidding in Mumbai to find the highest bidder for a 31 per cent stake in Satyam Computer," Satyam board chairman Kiran Karnik told PTI.
"We hope by weekend, the transfer of management would happen as we would recommend to the Company Law Board on Wednesday our decision on the highest bidder. It may take a day or two for the CLB to approve the new investor," Karnik said.
He added that board members Deepak Parekh and S B Mainak may not participate in the selection proceedings if the bidders happen to be companies in which they or their companies have an interest.