Tech Mahindra to opt for preferential allotment

Tech Mahindra today said it will request the Satyam board to allot shares on a preferential basis to raise its stake in the Hyderabad-based firm to 42.7 per cent as the company's open offer received a tepid response.

"Due to the weak response of the open offer we will request the Mahindra Satyam board for the preferential allotment as laid down in the bidding document. Post the preferential allotment, the stake of Tech Mahindra in Mahindra Satyam will be 42.7 per cent," a company spokesperson said.

The preferential allotment would be made at the open offer price of Rs 58 a share.

The offer, which opened on June 12, closed yesterday.

"The final number of shares tendered and accepted (including shares underlying American Depository Shares) will be announced on July 8, 2009," Tech Mahindra had said yesterday.

However, the company has not decided on the future course of action post the preferential allotment, he added.

The open offer price of Rs 58 a share was much less than the prevailing market price of Satyam, which is hovering around Rs 70-80 level.

The scrip has gained significantly since the time Tech Mahindra acquired a stake in Satyam in April. The scrip has surged over 58 per cent since April 22.

The IT firm, which has earlier picked 31 per cent stake in Satyam for Rs 1,756 crore in April, has the option of subscribing to new shares of Satyam.