Satyam Bid: The Losers
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Satyam Bid: The Losers

By Madhav A Chanchani

  • 13 Apr 2009

Tech Mahindra was not really a favourite even though it emerged as a winner for the troubled IT services firm Satyam Computer Services. Who all lost out? Larsen & Toubro (L&T), which was in the race till the last moment, lost out on the Satyam opportunity along with private equity fund Wilbur Ross & Co.

L&T's Rs 45.9 per share bid stood behind Tech Mahindra's Rs 58 per share bid, but was much higher than Rs 20 per share bid put in by Wilbur Ross. A number of other potential bidders also took a shot at Satyam, but they pulled out at various points in the race.

The Satyam acquisition was looked at as an opportunity by mid-tier IT and outsourcing firms as a deal that could take them to the next level. And the deal may just do that for Tech Mahindra, which is expected to add around $800 million-$1 billion in annualised revenues with the acquisition. Many aspirants like Cognizant, Spice Group, iGate Corporation and Hinduja Group were bidders initially in the race for Satyam.

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The biggest loser from the Satyam race may just be the engineering major L&T. In a bid to snap up the fraud hit IT firm, L&T had picked up about 9% stake in Satyam from open markets. It holds a total of 12% stake.

Now that they have lost, what does L&T plan to do? The company will hold onto its current 12 per cent stake in the software company, CFO YM Deosthale told a TV channel. It cannot sell a two-third of its 12% stake in Satyam in open offer as it has a standstill agreement with the board.

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