The government-appointed board of Satyam Computer Services is set to invite expressions of interest (EoI) from potentialbidders next week, after the market regulator allowed it to invite bids from strategic investors for buying management control in the company.
The Securities & Exchange Board of India (SEBI) gave its approval for an international bidding process that will allow a strategic investor to acquire 51% of the company. The field will now be open to global technology firms including IBM, Fujitsu, Oracle, besides engineering firm L&T, Tech Mahindra, BK Modi-promoted Spice group and Hinduja Global Solutions. Satyam shares rose 19.94% on Friday on the Bombay Stock Exchange
to close at Rs 42.10.
“Several MNCs will bid for Satyam, as it can provide them a low-cost operational base in India. Besides, the valuation of Satyam will also be attractive if they are willing to take the risk of fighting legal battles abroad,” said an IT analyst who declined to be named.
Domestic firms which have expressed interest in acquiring Satyam were guarded in their response. “We are waiting for more clarity on information that Satyam will provide on its financial situation,” said CP Gurnani, president, international operations Tech Mahindra.
The sale process will start with the selection of a strategic investor through a competitive price-bid auction. The reserve or floor price will be fixed by the board. The strategic investor, once finalised, will be allowed to acquire up to 31% of Satyam’s share capital through a preferential allotment and the balance 20% through an open offer. The open offer will be made at the same share price as the one paid by the investor for the subscription of newly-issued equity shares.
If the investor fails to acquire 51% through the open offer, he would have the right to subscribe to additional newly-issued equity (or a second preferential allotment). This would, however, not be followed by an open offer.
Back-of-the-envelope calculations show that the investor could infuse around Rs 1,212 crore of capital if the price for the preferential allotment is Rs 40 per share. If shareholders fully subscribe to the 20% open offer, the investor would have to pay them around Rs 780 crore.
The Securities & Exchange Board of India (SEBI) has already eased pricing norms for the proposed preferential offering in Satyam.
source:http://economictimes.indiatimes.com/Infotech/Software
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment