Tech Mahindra’s open offer for Satyam begins June 12 (Lead)

Mumbai, April 22 (Inditop) Tech Mahindra Wednesday announced its open offer for a 20-percent additional stake in Satyam Computer Services at Rs.58 per share, after buying 31 percent equity in the IT bellwether following a global auction.

The offer to all existing shareholders of the Hyderabad-headquartered Satyam opens June 12 and closes July 1, the company told the regulators. An order passed by the Company Law Board has fixed a three-year lock-in for the acquired shares.

The conclusion of the process will give Tech Mahindra, which is acquiring Satyam through its subsidiary Venturebay Consultants, a controlling 51-percent hold over India’s fourth largest IT company that was rocked by a Rs.78 billion ($1.5 billion) financial fraud perpetrated by its founder.

The offer will seek to buy 199,079,413 shares of Satyam from the public and institutions at a premium of Rs.56 for a Rs.2 Satyam share, the company said the regulatory filing. It will cost the company an additional Rs.11.54 billion.

If the stake acquired is less than 51 percent after the offer closes, Tech Mahindra will have the right to subscribe to additional newly-issued equity so that the resulting share is 51 percent.

As per data available with stock exchanges, major institutional shareholders in Satyam, who own more than one percent equity include infrastructure major Larsen and Toubro with 12.04 percent and financial services major Fidelity with 8.71 percent.

The state-run Life Insurance Corp (LIC) holds 2.81 percent and broking and financial services firm Religare has 1.03 percent.

Mahindra and Mahindra, the promoter of Tech Mahindra, owns 44.18 percent equity in the company, with Britain’s BT holding owning a 30.98 percent stake. The total promoter holding in the company is about 83.26 percent while the public and other institutions hold the rest.

Both Satyam and Tech Mahindra scrips closed lower on the Bombay Stock Exchange Wednesday, with the Satyam stock closing 4.19 percent below its last closing figure at Rs.46.90, while the Tech Mahindra scrip ended 3.71 percent in the red at Rs.306.30.