Mahindra Satyam gets CLB nod for preferential issue to Tech Mahindra

The Company Law Board (CLB) has allowed Mahindra Satyam to issue preferential shares to Tech Mahindra after the company's open offer received a poor response.

Tech Mahindra had received tender offer for a total of 420,915 shares of Satyam common stock (including 268,656 shares underlying ADSs), representing less than 0.1 per cent of its outstanding common stock against a tender for 20 per cent of the outstanding stock, the company said in a release.

These shares, together with the shares already owned by Tech Mahindra and its wholly owned subsidiary, represent approximately 31.04 per cent of Satyam's outstanding shares of common stock, it said

Mahindra Satyam has CLB approval for preferential allotment of new shares to Tech Mahindra in case of its open offer gets a poor response.

Mahindra Satyam now proposes to issue 198.66 million new shares to Tech Mahindra affiliate Venturebay Consultants Pvt Ltd, at Rs58 a share, which will raise its stake to 43 per cent.

Tech Mahindra bought a 31 per cent stake in fraud-hit Satyam Computer Services at Rs58 a share, at an auction in April, and launched a public offer for another 20 per cent in the IT company in the open market at the same price.

However, only 420,915 Satyam shares were tendered to the offer, less than 0.1 percent of the outstanding shares, due to a recent spike in the share price of the renamed Mahindra Satyam.

The Mahindra Satyam stock closed one per cent lower at Rs70.45, but way above the offer price of Rs58 a share, in Mumbai market.