Satyam Invites Investor Bids by Thursday

Monday, March 9, 2009

Satyam Computer services made an announcement today for the start of a Bidding process that could lead to an investor acquiring a majority stake in the company. This was the news going around the market for the past few days that satyam got to be acquired by L & T or Tech mahindra or any other company. But this annoucement gonna stop those assumptions and the bidding is open to all the bidders.

Indian regulator, Securities and Exchange Board of India (SEBI) has given permission to Satyam to sell 51% percent of the company's equity in a global bid
While 31 percent of the stake will be offered by way of a preferential share offering, another 20 percent will have to be purchased in an open offer from other shareholders of the company, in line with Indian regulations.

Interested bidders have to register their interest online with the company by 5.00 p.m., local time, on Thursday. They will then receive a request for proposal from the company and are asked to submit a detailed expression of interest by Friday.

As satyam is known for its Background verification when recruiting employees for the company, this is the same even when it is choosing the owner for themselves. sounds funny but check it out,

Bidders will have to provide proof of access to at least 15 billion rupees (US$292 million) in funds.

Bidders who are going to get registered must show the proof of access to at least Rs 15 Billion in funds.

But only few selected bidders will have the access to the company's financial data and other information about the company which makes them have a clear picture about the company.

Next comes is access to certain business, financial and legal diligence materials will be provided to shortlisted bidders only after they have executed several agreements, which also has an non-disclosure agreement.

After all this short-listed bidders will be asked to submit their bids and an executed copy of the share subscription agreement.The company did not list the procedure by which bidders will be short-listed, and did not specify what type of financial and business information will be released to bidders on the short list. A company spokeswoman said no further information on the bid process is available at this point, apart from the company statement.

The process for selecting a bidder will be overseen by a former chief justice of India or a former Supreme Court judge appointed by the company, Satyam said.

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