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Rediff.com  » Business » Tech Mahindra not to hike Satyam offer price

Tech Mahindra not to hike Satyam offer price

June 11, 2009 20:09 IST
In the face of surge in stock prices of Satyam to about Rs 81 a share on the eve of the open offer for beleaguered company, its new owner Tech Mahindra said it will not hike the offer price.

"Our agreement with the market regulator SEBI is for Rs 58 a share (the price at which it acquired 31 per cent stake in the open bidding)," Vineet Nayyar, Chief Executive of Tech Mahindra, told PTI after the Satyam board meeting.

Asked about options in case the open offer was not fully subscribed, Nayyar said "in case we do not get adequate response, we will go for preferential issue to take our holdings in the company to 42 per cent."

Satyam shares prices have been rising for the past three straight sessions after the company reported better than expected financial results on Tuesday. It posted a stand-alone profit of Rs 181 crore for the October-December 2008 quarter.

However, the government-appointed board has decided against endorsing the open offer saying it would be construed as a "negative statement" about fundamentals.

Chairman of Satyam Board Kiran Karnik in a regulatory filling with the US market regulator SEC said, "that supporting the public open offer would tantamount to recommending the share holders to sell their holdings in Satyam."

Karnik further said some of the government-appointed members of the board may be disengaged from the firm within the next week.

"Some of the (nominee) board members may leave Satyam within next week," Karnik said. Following disclosure of accounting fraud by the founder Ramanlinga Raju on January 7, the government superseded the board of the IT firm and appointed its own nominees to run the firm.

The government nominees include Kiran Karnik, CII chief mentor Tarun Das, HDFC Chairman Deepak Parerk and former ICAI President T M Manoharan.

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