Indian IT group Tech Mahindra, which is part owned by
BT, will take over control of fraud-tainted IT services firm Satyam
after its initial bid for a 31% share - worth about $350m - was the
highest made for the business.
This values the firm at about $900m.
Tech Mahindra emerged as the preferred buyer after outbidding
firms including Indian BPO company Cognizant and engineering giant
Larsen & Toubro.
Other companies said to have been interested include IBM, HP and
CSC.
The sale to Tech Mahindra ends weeks of
speculation over Satyam's future since its former chairman
confessed to inflating the company's financial results to the
tune of $1bn. But there will be continuing uncertainty for the
buyer because the extent of the fraud is not yet clear and there
are a number of legal challenges against Satyam.
Satyam was thrown into disarray and its survival was in question
when the scandal left it short of cash and customers and employees
low on confidence.
Peter Brudenall, partner at UK law firm Hunton & Williams,
told NDTV Profit that there were a number of class actions against
Satyam which were in the early stages. "These could be for up to
$100m."
Kiran Karnik, chairman at Satyam, said Tech Mahinda had supplied
the highest bid. "This is still a work in progress with steps still
to go. On behalf of all Satyamites and their families, we
congratulate Tech Mahindra on being the highest bidder. The
selection of the highest bidder, in a fair, open and transparent
process, signals a new stage for the company in its progress
towards stabilisation and growth."