Hindujas opt out of race.
The ‘usual suspects’, Larsen & Toubro, Spice group and Tech Mahindra, figure among the bidders that completed the first step of registration to acquire the troubled Satyam Computer Services.
The process for registering potential bidders closed today at 5 pm. Satyam’s government-appointed board will meet tomorrow to scrutinise the Expressions on Interest (EoIs) submitted by the potential bidders.
“We have registered our interest for the bid,” confirmed an L&T group spokesperson. “In line with the process set out by the Satyam board, Tech Mahindra has today registered its interest in participating in the bidding process,” said a Tech Mahindra spokesperson.
| BUYING STRENGTH | ||
| Company | Consolidated (in Rs crore) | |
| Net worth | Cash | |
| L&T Group | 10,805.21 | 1,560.78 |
| M&M | 6,152.30 | 1,727.99 |
| Tech Mahindra | 1,257.20 | 97.60 |
| Source: BS Research (Data as of March 31, 2008) * As on December 31, 2008, Tech Mahindra had cash of $110 million (around Rs 570 crore) | ||
The Hinduja group, which was evaluating the deal so far, has decided to opt out of the race. “After careful consideration, we have decided not to participate,” confirmed Prabal Banerjee, Group CFO, Hinduja group.
Global majors like IBM, Hewlett-Packard and Computer Sciences Corporation were understood to have been evaluating the deal, but all these companies declined to comment.
Satyam’s stock today was down 3.18 per cent, to close at Rs 47.20 on the Bombay Stock Exchange.
Each interested bidder with a valid registration will now be sent a request for proposal, and asked to submit a detailed expression of interest with the proof of availability of funds of at least Rs 1,500 crore ($290 million) by 5 pm on March 20.
Based on the submitted EoIs, eligible bidders will be shortlisted and given access to certain business, financial and legal diligence material relating to Satyam, provided they have executed a non-disclosure and non-solicitation agreement, a stand-still agreement and a “no-claims” undertaking.
The successful bidder will have four days to deposit with the company the entire subscription amount, and the requisite funds for the public offer in an escrow account.
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Mar 9: Satyam begins process to select investor
