Tech Mahindra edges out L&T to acquire Satyam

13 April 2009

Ending three months of suspense, dark horse Tech Mahindra today become the new owner of fraud-hit IT blue chip Satyam Computers.

It was the top bidder with an offer of Rs58 a share for a majority stake in the IT outsourcer, edging out  its nearest rival Larsen & Toubro Ltd. Investment firm W L Ross & Co and Cognizant Technologies of the US were also reported to have submitted bids.

Vineet Nayyar, Tech Mahindra's vice chairman and CEO was quoted as saying that the company carried out a fair assessment of Satyam's legal liabilities arising out of the class action suits in the US and pending cases while pricing the bid.

Tech Mahindra will acquire the stake in an all-cash deal, which represents a 23 per cent premium on Satyam's last closing price. This will be followed by an open offer for a 20 per cent stake to take management control of the company.

After evaluating the bids, the government-appointed board of Satyam on Monday announced that it had selected Venturbay Consultants Pvt Ltd, a subsidiary of Tech Mahindra Ltd, as the highest bidder to acquire a controlling stake in the company, subject to the approval of the Company Law Board.

"On behalf of all Satyamites and their families, we congratulate Tech Mahindra on being the highest bidder. The selection of the highest bidder, in a fair, open and transparent process, signals a new stage for the company in its progress towards stabilisation and growth," Satyam said in an announcement.