After three months of the new board taking over Satyam, Tech Mahindra finally won the high profile race for Satyam. The company bid Rs 58 per share, beating rivals engineering major Larsen & Toubro and private equity (PE) major Wilbur Ross. Tech Mahindra will have to pay Rs 1,757 crore to buy the 31% stake in Satyam. The total acquisition cost will rise upto Rs 2,890 crore once it gets the mandated 51% stake.
Satyam's government-appointed board clarified that Tech Mahindra will take control only when the Company Law Board (CLB) gives its nod for the sale process. They also admitted that the crucial process of restatement of accounts would take a few more months.
Samir Arora, Fund Manager, Helios Capital, feels the model which the government adopted for Satyam could be an operating model for future scams in India. He credits the government for handling the situation deftly and swiftly without loss of jobs, confidence, or clients.
Arora feels the risk going forward will be on Tech Mahindra financing the deal.
However, JR Varma, Former Member, SEBI, said the deal has gone very well for everyone except Satyam's shareholder. "A preferential allotment to Tech Mahindra means the old shareholders of Satyam will receive less. Other than the open offer that is going to be there, they are not going to receive any money. It is not very clear whether they will benefit from the ongoing business as well."
Sudin Apte, Senior Analyst, Forrester, feels questions still persist on how the integration process will pan out. Clients, he feels, are also wondering how a company specializing in telecom will be able to service them. "Also, it is not exactly present in the domain and the lines of services of Satyam." He feels a Tier-I Indian company or a multinational could have been a better option to take over approximately a USD 2 billion company when this fiasco opened up. "I wish there was one top company who was trying to buy this company as it would have been much better for clients." According to Apte, there is going to be a possible 5-6% rationalization of staff at Satyam based on how its clients ramp up.
Also Read:
Restatement of co's accounts will take few months: Satyam
Continued on next page…
Thanks to http://www.moneycontrol.com
Satyam's government-appointed board clarified that Tech Mahindra will take control only when the Company Law Board (CLB) gives its nod for the sale process. They also admitted that the crucial process of restatement of accounts would take a few more months.
Samir Arora, Fund Manager, Helios Capital, feels the model which the government adopted for Satyam could be an operating model for future scams in India. He credits the government for handling the situation deftly and swiftly without loss of jobs, confidence, or clients.
Arora feels the risk going forward will be on Tech Mahindra financing the deal.
However, JR Varma, Former Member, SEBI, said the deal has gone very well for everyone except Satyam's shareholder. "A preferential allotment to Tech Mahindra means the old shareholders of Satyam will receive less. Other than the open offer that is going to be there, they are not going to receive any money. It is not very clear whether they will benefit from the ongoing business as well."
Sudin Apte, Senior Analyst, Forrester, feels questions still persist on how the integration process will pan out. Clients, he feels, are also wondering how a company specializing in telecom will be able to service them. "Also, it is not exactly present in the domain and the lines of services of Satyam." He feels a Tier-I Indian company or a multinational could have been a better option to take over approximately a USD 2 billion company when this fiasco opened up. "I wish there was one top company who was trying to buy this company as it would have been much better for clients." According to Apte, there is going to be a possible 5-6% rationalization of staff at Satyam based on how its clients ramp up.
Also Read:
Restatement of co's accounts will take few months: Satyam
Continued on next page…
Thanks to http://www.moneycontrol.com
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