Mahindra Satyam to allot additional 18.96% stake to Tech Mahindra Unit

Satyam Computer Services Ltd., now called Mahindra Satyam, Wednesday said it will allot 198.66 million shares of the company on a preferential basis to Venturbay Consultants Pvt. Ltd., a unit of Tech Mahindra Ltd., for 11.52 billion rupees ($238 million), as per a Company Law Board order.

After the allotment, Tech Mahindra will hold about 43% of Mahindra Satyam's outstanding share capital of 1.18 billion shares, Mahindra Satyam said in a statement.

Tech Mahindra on Monday said its open offer for 20% more in Satyam resulted in 0.1% of Satyam's shares being tendered, taking the company's stake in Satyam up to 31.04%.

It bought 31% in Satyam in April after winning an auction. The company had said it intended to subscribe for additional shares via a second preferential allotment.

The order by the Company Law Board - a quasi-judicial body - also approved the appointment of a financial auditor for this fiscal year ending March 31., 2010, subject to ratification by shareholders at Mahindra Satyam's next annual shareholders' meeting, the company said.

The details on Satyam Computer Services Ltd.
Deal Value (US$ Million) 230.44
Deal Type Private Placement
Sub-Category None
Deal Status Announced: 2009-07-06
Deal Participants

Target (Company) Satyam Computer Services Limited
Acquirer (Company) Tech Mahindra Limited
Deal Rationale

The acquisition of Satyam would help Tech Mahindra diversify its software services business and strengthen its market position. The transaction would also enable Tech Mahindra, which is focused on the telecom vertical, to diversify into other verticals such as financial services, healthcare, and manufacturing. Tech Mahindra would also gain Satyam's portfolio of customers.

% Acquisition 18.96%
Offer Price ($ per share) 1.16
No. Shares Issued 198658498