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BW Businessworld

Three Put In

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Larsen & Toubro, BK Modi’s Spice group and Tech Mahindra registered on Thursday for the right to bid for a majority stake in fraud-hit Satyam Computer Services. However, the Hinduja group opted out of the race.

Bidders had time till 5pm to register for the sale process.

It is speculated that Hewlett-Packard and Computer Sciences Corporation may have also bid. This, however, could not be confirmed. Capgemini, Europe’s largest computer consultancy, appears to have backed out.

There was no word from IBM, Fujitsu, HCL Tech and private equity player General Atlantic — all of whom had earlier shown interest in the the bidding process that would take place later this month.

The Satyam board will meet tomorrow to examine the bids. It is expected to ask for a detailed expression of interest and then draw up a shortlist. The bidders will also have to show proof that they have a cash chest of at least Rs 1,500 crore to underpin any bid they make. The entities that make the cut will then be granted access to business, financial and legal diligence materials of the company.

L&T — which has a 12 per cent stake in Satyam — and the Spice group were expected to put in their bids.

The Rs 3,605-crore Tech Mahindra had been undecided on submitting a bid. Most of Tech Mahindra’s revenues come from telecom, and Satyam will add multiple verticals to its operations. “That could be one of the reasons why Tech Mahindra registered,” said an analyst. Tech Mahindra may have teamed up with a private equity player to bid for Satyam.

The Hindujas did not say why they had decided not to bid. It is speculated that they were uncomfortable with the legal liabilities that Satyam faces because of class action suits in the US and the fuzzy picture about the company’s true financial position after founder Ramalinga Raju admitted he had fudged the accounts for years.

“Considering all aspects, we have decided not to participate in the bidding process,” said Prabal Banerjee, group CFO of the Hinduja group.

A spokesperson for L&T said the company would take a final call after studying the data submitted by Satyam.

Earlier today, Spice decided to reconstitute the board of Spice Innovative Technologies — the group firm through which it intends to bid for Satyam. Spice has brought on board Jai Pathak, the head of Asia-Pacific practice at Gibson, Dun and Crutcher, which is advising Modi on the bid.

The Satyam stock fell today 3.2 per cent to Rs 47.20 on the BSE on profit booking.

(Courtesy: Telegraph)

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