Mahindra may buy up to 70% in Satyam; but cant take it private
Tech Mahindra, the successful bidder for 31 per cent equity in Satyam Computer, can acquire up to 70 per cent stake in the scam-hit IT company through an open offer but cannot take the firm private.business Updated: Apr 19, 2009 21:04 IST
Tech Mahindra, the successful bidder for 31 per cent equity in Satyam Computer, can acquire up to 70 per cent stake in the scam-hit IT company through an open offer but cannot take the firm private.
The ‘share subscription agreement´ between two parties caps Tech Mahindra’s maximum holding in Satyam at 70 per cent through a preferential allotment of 31 per cent equity and a consequent public offer, and also bars the new owner from delisting Satyam shares in the US or taking it private.
Pursuant to a government-mandated bidding process for brining in a new promoter for Satyam, Tech Mahindra has emerged as the highest bidder for a 31 per cent equity, to be acquired through a preferential allotment of shares for Rs 1,756 crore at a price of Rs 58 a share.
As per the agreement, Tech Mahindra has also agreed to launch an open offer, within four working days of getting the CLB approval, for purchasing from the public additional shares amounting to a minimum of further 20 per cent stake.
However, the agreement caps the shares to be acquired through public offer at “a maximum of that percentage of shares which when aggregated with the 31 per cent acquired from the company (Satyam) in the preferential allotment and any other shares already beneficiary owned by the bidder would not exceed 70 per cent of the enhanced share capital...”