Satyam Computer to buy out founders’ property firms for Rs7,680 crore
16 Dec 2008
Software services major Satyam Computer Services Ltd has agreed to acquire majority stake in Maytas Infra and buy out Maytas Properties for a total of around Rs7,680 crore ($1.6 billion).
The two property firms are founded by the families of chairman B Ramalinga Raju and family members of Ramalinga Raju sit on the boards of both these companies.
Rama Raju Jr is one of the key promoters of Maytas Properties, which develops urban infrastructure, and has been on its board since 2005.
B Teja Raju, the elder son of Ramalinga Raju, is the vice chairman of Maytas Infra which is engaged in infrastructure construction and asset development. The company employs over 3,000 people. The company registered a net profit of Rs17 crore on a turnover of Rs354 crore for the second quarter ended 30 September.
Satyam will acquire 100 per cent stake of Maytas Properties for Rs6,240 crore (around $1.3 billion) and Rs1,440 crore (around $0.3 billion) for the 51 per cent stake in Maytas Infra.
"This would de-risk the core business by bootstrapping a new business vertical in infrastructure. This market segment can mitigate the risk attributes to developed markets and traditional verticals that are likely to get impacted by the recessionary economy," Ramalinga Raju, chairman and founder of Satyam, said.
Satyam has cash reserves and equivalents of Rs5,500 crore (around$1.15 billion). It proposes to acquire 31 per cent in Maytas Infra from the promoters at a price of Rs475 a share and make an open offer for additional 20 per cent since the company is listed on the domestic stock exchange.
The open offer has been approved at Rs525 a share and is subject to change in line with SEBI guidance, the company said.