In a sale aimed at giving the scandal-hit outsourcing giant vital capital and a new beginning, India's Tech Mahindra won the bidding on April 13 for Satyam Computer Services.
The mid-level outsourcing firm will have to pay nearly $600 million for a majority share of Satyam, which has struggled since its founder earlier this year confessed to staging India's biggest accounting fraud.
Satyam said the news "signals a new stage for the company." The firm, which was India's fourth-largest outsourcer by revenues when the scandal broke, acts as back office for some of the world's biggest manufacturers, health care providers and banks.
The offer represents a 23% premium to Satyam's last closing share price and would mean Tech Mahindra would have to pay about 29 billion rupees (US$581.3 million) for a 51% stake. Tech Mahindra is majority owned by Mahindra and Mahindra, one of India's top 10 industrial houses, in partnership with British Telecommunications Plc.
Tech Mahindra has 23,000 employees, less than half Satyam's head count of 48,000 that includes contract workers.
In January, Satyam founder B. Ramalinga Raju admitted faking a billion-dollar bank balance and inflating the company's profits. Raju, his brother and seven other people, including two Price Waterhouse India auditors, are now being held on charges of conspiracy, cheating, forgery and falsification of accounts.
Copyright Agence France-Presse, 2009