Tech mahindra outbid Larsen and Toubro Ltd, a major engineering company that already owns 12 percent of Satyam. Another company that was in the cards but was outbid by Tech Mahindra was tech company Cognizant backed by equity investor Wilbur Ross. 

 

Tech Mahindra made the highest offer at 58 rupees, or $1.16, a share. Larsen and Toubro offered 45.90 rupees, while Cognizant offered 20 rupees, said the company’s board chairman Kiran Kamik. 

 

The price is a 23% premium on Satyam’s most recent closing. Satyam lost a considerable number of clients, investors and employees especially after the company’s chairman acknowledged the fact that he was involved in accounting fraud in early 2009. According to the new board of directors appointed by the company’s owner Ramalinga Raju, the accounting fraud was of about $1 billion. 

 

“The selection of the highest bidder, in a fair, open and transparent process, signals a new stage for the company in its progress towards stabilization and growth,” Karnik, said. “We hope this will infuse greater confidence and comfort amongst customers.”

 

Tech Mahindra’s shares price rose to 359.45 rupees, 12.31 per cent higher than its previous close on the Bombay Stock Exchange.

 

The offer from Tech Mahindra is for 31 percent of Satyam. An additional 20 percent of the company will be purchased from the open market in order to give Tech Mahindra the controlling stake.