Satyam may buy back shares

Having infuriated investors with a deal that would have propped up companies of its promoters, Satyam Computers is now looking to mollify shareholders through rewards such as a share buyback or dividend payout.

"We will take the decisions in few days. In the light of whatever has happened, buyback is one of the option... It being one of the investor friendly measures that we may consider. We are also discussing whether it will be dividend or buyback," said Srinivas Valdamani, chief financial officer, Satyam.

The company yesterday announced a $1.6 billion deal to acquire Maytas Properties and Maytas Infrastructure, companies run by Satyam chief Ramalinga Raju's sons B Rama Raju and Teja Raju.

Investors' opposition forced Satyam to call off the deal today.

Valdamani said the company has a cash surplus of $1.1 billion and it was meant for inorganic and organic growth and corporate actions like giving dividends and bonus share or a buyback.

Announcing the decision to call off the acquisition in light of the setback received from the investors community, Raju said earlier today: "We have been surprised by the market reaction to this decision even though we were quite positive about the merits of the acquisition."

The reversal comes within a day of Satyam board approving the decision to acquire Maytas Properties for $1.3 billion and 51 per cent stake in Maytas Infrastructure for $0.3 billion. Institutional investors such as Reliance Mutual Fund, SBI Mutual Fund, Templeton Mutual Fund and CLSA, with some of them even threatening to resist the deal.

Satyam shares were down 31.24 per cent at Rs 155.75.

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