Satyam gets Sebi nod to sell 51% stake

Satyam Computer Services Limited today announced  that it has received approval from the Securities and Exchange Board of India (Sebi) to facilitate a global competitive bidding process which enables it to select an investor to acquire a 51 per cent interest in the company.

The process is expected to include a subscription by the selected investor of newly issued equity shares representing 31 per cent of the company’s share capital. Upon a successful closing of the subscription, the investor will be required to make a mandatory minimum public open offer to purchase a minimum of 20 per cent of the company’s share capital.  The open offer will be made at the same share price as the price paid by the investor for the subscription.

If upon the closing of the open offer, the investor would have acquired less than 51 per cent of the share capital of the company, he would have the right to subscribe to additional newly issued equity shares. The subsequent subscription, if any, will not result in requiring a further open offer, Satyam stated in a press release on Friday.

According to Satyam, that the investor will not be permitted to sell any equity shares acquired for a period of three years from the date of the acquisition, although the investor would be able to subscribe for additional equity shares. The company expects to invite expressions of interest from qualified investors shortly.  Qualified investors are expected to have total net assets in excess of $150 million (over Rs 750 crore).

The company would  announce the details of the competitive bidding process  later.

As of now, Global IT giant IBM is understood to be the front-runner to acquire Satyam. Other prominent players in the race are Larsen & Toubro (L&T), which owns 12 per cent in Satyam, and the B K Modi- owned Spice group.

SEBI had exempted Satyam from certain requirements of the Indian takeover regulations to facilitate the global competitive bidding process. The Company Law Board (CLB) had also authorised the Satyam's government appointed board of directors to select an investor.  CLB said the strategic investor should be selected through an open bidding process and that would be overseen by a retired judge.

Satyam stated it does not intend to register any securities in the United States or to conduct a public offering of securities in the US.

Meanwhile, the stock today zoomed 20% to Rs 42.10 on the BSE.