Tech Mahindra has won the bid for Satyam Computer Services. The long-drawn race finally drew to a close as it was confirmed that Tech Mahindra bid for Satyam at Rs 58 per share, while Larsen & Toubro, the other player in the fray, bid at Rs 49.50 per share.
Tech Mahindra will have to pay Rs 1757 crore for 31% at Rs 58 per share, whereas for the total 51% stake the company will have to pay Rs 2890 crore. Satyam will now have a market capitalization of Rs 5666 crore on expanded equity. Sources say that Tech Mahindra may rope in PE investor and will subscribe to additional equity to a PE partner.
The eagerly awaited Satyam bidding process started in Mumbai today. The deadline for submission of the final bid for Satyam was 9 am, April 13, 2009. The bidders submitted two envelopes; one a technical bid and second a financial bid.
Only a bidder who cleared the technical bid qualifies for the financial bid. In case of a 10% differential between one or more bids and the highest bid, then an open auction would be triggered. L&T, Tech Mahindra, Cognizant and Wilbur Ross were believed to be in the fray for acquiring the company.
The deadline for submission of the final bid for Satyam was 9 am. There are two envelopes, which will be submitted to the Board. One will be a technical bid and one will be financial bid. The technical bid will be opened first and the financial bids of only those bids which satisfy the technical bid will be opened for the second round. In the second round, these financial bids will be ordered from the lowest to the highest and the highest bidder will then be looked at.
If there is another bid which is 90% of the highest bid then there is going to be a series of open auction till you a very clear cut highest bidder emerges. So the board today is likely to recommend this highest bidder to the Company Law Board (CLB) and then CLB will take its view and announce the final bidders. This is likely to happen by the end of this week. The recommendation to the CLB can go today or tomorrow.
