Its Tech Mahindra finally: The Satyam aquirer

The Government nominated board of Satyam Computer Services has choosen its acquirer. It is Tech Mahindra.

The future of Satyam now will be Tech Mahindra as they out bid L&T by 9 INR per share. According to what I have read in Times of India website, Tech Mahindra bid for INR 58 while L&T bid for INR 49 per share. B. K. Modi’s spice group did not submit the final bid because of a difference of opinion in the way the auction should have proceded.

With this development, what is assured is that the future of the employees of Satyam Computer Services is now.

Satyam Computer Services: No longer this Logo will be used? I hope not!!!
Satyam Computer Services: No longer this Logo will be used? I hope not!!!
The new Owners: How long they will be able to drag Satyam
The new Owners: How long they will be able to drag Satyam

Satyam to fend off US Pension Fund suites

Satyam Computer Services, which is in the news for country’s biggest corporate and family fraud will limit its liability by saying a pension fund cannot join US litigation due the scandel.

Not only US funds, but England, Norwegian and Danish funds are seeking compensation against losses they have made due to the Satyam fraud.

Who ever the buyer of Satyam is, will have also to bear the liability and the number of law suits it brings in.

In all, an estimated loss of close to $100 million will be claimed from the company and the buyer will have to bear atleast 80% from his pocket directly. L&T who has keen interest in buying Satyam Computer Services after the fraud came to light, already owns close to 14% stake in the Company.

Satyam future to be out soon? L&T is the winner anyways

Satyam’s future would be out soon? There are conflicting reports in the market about the stance of Spice Group. Some section of media is reporting that Spice group is being seen as the favorite for purchasing Satyam, while it is also being reported that Spice would move out of the Financial bid citing irregularities as reason. What is going on is something every one is guessing!

Tech Mahindra and L&T would benefit the most from this acquisition since they have their own set ups and this move would be a inorganic growth for both the firms. Arranging finance would be a problem for Tech Mahindra without active backing from the parent group, Mahindra, while Spice is full of cash following the recent sale of Spice Communications. (more…)

Satyam Update: A new owner may be in sight

SEBI has authorized Satyam to sell up 51 pc stake to a bid winner. Following which, Satyam has begun the procedure to select a bidder by inviting for EoI’s from interested companies.

Bidders would have to submit their Expression of Interests (EoI) with a proof of availability of Funds to the tune of INR 1500 crore indicating the funds required to buy and run Satyam for a medium term. Though there is no base price mentioned for bidding, the amount can go up to INR 1000 Cr. After shortlisting the bidders, these individual companies would get access to critical information like Accounts and Legal, which may help them to conduct Due Diligence.

The Stock Market has reacted postively to this step. Already a few companies have made it clear they want Satyam to in their strides including Larsen & Tubro, Tech Mahindra, Spice Group, Fujitsu etc. IBM, which was reportedly interested for a while now has pulled out of the bidding process. This move is reasurring for its 40,000 strong workforce that they would finally see an end to their delima.

Some of these companies want the freedom to revise their bids after more information on diligence are shared. Their fear is well justified. What if they find something which is unviable?for their company?

The Satyam Story

Well, if you are wondering that I have written this post quite late, then I would completely agree. I was so busy reading stories that I did not wish to write one. In this post, I am only writing what I feel ideally it should be.

S A T Y A M
M A Y T A S

Read it from right or left, you would read Satyam and Maytas. That’s how inclined were the Raju family with the name Satyam. The land greedy Raju’s original face finally came out for every one to see. That, in itself was so surprising that the stock market went crashing day after day. The Satyam share plunged to an all time low of Rs. 11 before hovering around 30 today.

I think this is more or less a breach of trust than acutal theft. Ramalinga Raju inflated accounts to get cheaper loans and put Satyam with a strong Balance Sheet to compete against the gaints of the IT. Satyam was included in the reference of BIG4 of the India’s IT industry space. Before the confession came in, the whole IT faternity was clear that no body can challenge the company’s place in the BIG4.

Ask the same people today, and listen to their change in tone. Obviously natural, no one was aware of the storm that was to sweep the things at stake here. One of the most important thing to observe was the prompt reaction from the government which is really rare to happen.

I assume, and purely in my mind only, was the government thinking of the 50k employees or something else in the whole Satyam fiasco. No offence please, but after all its human mind and it tend to think in all angles possible.

Hope the country emerges sucessfull in clearing this mess out. Best of Luck!