Tech Mahindra wins bid to acquire controlling stake in Satyam Computer

By Lisa Kerner

Charlotte, N.C., April 13 - Venturbay Consultants Private Ltd., a subsidiary controlled by Tech Mahindra Ltd., was selected as the highest bidder to acquire a controlling stake in Satyam Computer Services Ltd., it was announced on Monday.

Satyam's board of directors selected Tech Mahindra following a global competitive bidding process that began March 9. The process was ordered by the Hon'ble Company Law Board and approved by the Securities Exchange Board of India.

Technical criteria considered by the board included each bidder's:

• Corporate governance and management track record;

• Corporate social responsibility policies;

• Revenues and profitability from Indian and overseas operations;

• Strategic plan for Satyam; and

• Experience in owning, operating and managing information technology companies, global companies of the scale and scope of Satyam and distressed companies.

Tech Mahindra and Satyam executed a share subscription agreement on Monday in which Tech Mahindra agreed to acquire 31% of Satyam's share capital for $351 million.

"The selection of the highest bidder, in a fair, open and transparent process, signals a new stage for the company in its progress towards stabilization and growth," Satyam chairman Kiran Karnik said in a company news release.

"This event ought to dispel the anxiety of all stakeholders as it re-positions the company's commitment to revival and good governance," Karnik said.

Tech Mahindra will be required to make a mandatory cash tender offer to acquire an additional minimum of 20% of the enhanced share capital and convertible instruments at a minimum price of approximately $1.16 per share.

Holders of Satyam's American Depositary Shares in the United States are expected to be able to participate in the public offer through a facility to be implemented by Citibank, NA, the news release said.

Goldman Sachs and Avendus Capital advised Satyam, a Hyderabad, India-based business and information technology services company.

As previously reported, Satyam was thrown into turmoil in January after its chairman and founder, B. Ramalinga Raju, unexpectedly resigned after admitting he overstated the company's cash and bank balances by $1 billion and inflated profits over the last several years.

Pune, India-based Tech Mahindra is a systems integrator and business consulting firm focused on the communications industry

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