Government clears Satyam sale, but bidders await details

07 March 2009

The scam-beleaguered Satyam Computer Services said on Friday that it would soon invite bids from suitors across the world for a controlling 51 per cent stake in the company, now that the Securities and Exchange Board of India has clarified the bidding norms.

"The bidding process will begin shortly," Satyam's government-appointed director Deepak Parekh (who also heads the Housing Development and Finance Corporation) told reporters after meeting corporate affairs minister P C Gupta in New Delhi.

Parekh had called on Gupta along with Satyam chairman Kiran Karnik and board member Tarun Das. Gupta reportedly told them that a retired Supreme Court judge would oversee the bidding process in order to ensure transparency.

Satyam has been accorded a special status, and existing open offer rules have been relaxed to attract bidders. It is expected that an issue of preferential shares would be followed by an open offer of the company to the highest bidder.

The preferential issue is likely to be for a 31 per cent stake and the shares will be issued at the highest bid price. An open offer at the issue price would follow; and it would have to be for a 20 per cent stake. Full subscription will thus ensure a majority control.

Besides, in a departure from normal practice, the Satyam sell-off proposal will not be reviewed by the usual takeover panel, but vetted and cleared by the department of takeovers at SEBI. This would help fast-track clearance of proposals.