Satyam update on stake sale tomorrow

The Satyam board today met informally in Mumbai to take stock of the ongoing process and assess the technical competence of suitors for the scandal-hit IT firm. The meeting was also attended by investment bankers Avendus and Goldman Sachs as well officials from Larsen & Toubro and Tech Mahindra (bidders in the fray).

Later this evening, Satyam Computer Services board member Deepak Parekh told reporters here that “some news with regard to the stake sale of Satyam will be announced tomorrow”. Kiran Karnik, chairman of the government-appointed board, added: “The due diligence process is still not over. We are sticking to our earlier time schedule for the stake sale.”

Some of the people spotted with the board members today included Vineet Nayyar, vice chairman, MD and CEO and C P Gurnani, president (international operations), Tech Mahindra, and L&T Chief Financial Officer Y M Deosthalee who accompanied some company officials.

Last evening, the Satyam board had clarified in a press statement that they have made a few changes in the bidding process more transparent. The highest bidder, according to new norms, will be declared winner provided the second highest bid is not within the 10 per cent range. If the second highest bidder is within the 10 per cent range, then the board will call for an open auction.

The board is understood to have shortlisted around eight bidders. These include the $7 billion engineering behemoth L&T, IT major IBM, and Tech Mahindra. The BK Modi-promoted Spice Group withdrew from the bidding process, citing lack of transparency. The US-based private equity firm, W L Ross & Co, is learnt to have completed the due diligence on assets and liabilities of Satyam.

The shortlisted bidders will be asked to submit the financial bids next week for acquisition of 31 per cent stake in Satyam. The winning bidder will have to make an open offer to shareholders to buy an additional 20 per cent stake. The board had earlier indicated that it was hopeful of finalising a buyer by April 30.