Pune-based Tech Mahindra Ltd. won a bidding war for control of scandal-ridden Satyam Computer Services Ltd. The company beat billionaire Wilbur Ross and Larsen & Toubro Ltd. with a $579 million offer, according to Bloomberg reports.
In January, State Farm terminated its contract with the Mumbai outsourcing firm, and CIGNA confirmed its monitoring of Satyam developments, Insurance Networking News reported.
In early March, the company asked the Securities and Exchange Board in India for permission to sell a 51% share, and at that time, IBM was reported as the front-runner with interest in the struggling company.
At 58 rupees per share, the deal will net Tech-Mahindra a 31% stake in the company, with the acquisition calling for it to acquire another 20% from investors at the same price, Satyam said. Thats about one-tenth of Satyams one-year peak of 524.9 rupees on May 29. U.S. billionaire Ross offered 20 rupees, and Larsen 45.9 rupees a share, Satyam Chairman Kiran Karnik told Bloomberg.
Owned by BT Group Plc, Tech Mahindra was set up as a venture between BT Group and Indias largest utility-vehicle maker, Mahindra & Mahindra Ltd., in 1986. The company now counts the British telecommunications company as its largest client, as well as Cisco systems and Nestle.
The deal will make Tech Mahindra a more viable competitor to Tata Consultancy Services Ltd. and Infosys Technologies Ltd., two firms that offer similar technology outsourcing services, reports Bloomberg.The purchase is subject to regulatory approval.
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