The government appointed board of Indian IT services provider Satyam has changed the bidding process for companies that are trying to buy the company.
The company has been up for sale since it was thrown into chaos after its former chairman admitted that he had misreported financial results.
The company said yesterday that there will be a second round of bidding, as originally planned, only if none of the bidders offer at least 90% of the highest bid. If there are bids that are 90% of the highest bid, that bid will be the baseline value for a further competitive bid.
Bidders said to have shown interested in buying Satyam include western IT firms such as IBM, HP, CSC as well as Indian companies such as engineering firm Larsen & Toubro (L&T), IT services firm Tech Mahindra, and Spice Group, a diversified conglomerate.
The change to the bidding process should speed the sale of Satyam along.
Mark Lewis, head of outsourcing at law firm Berwin Leighton Paisner, said the longer the process goes on the more uncertainty that is created. "This is a way of speeding up the bidding process and separating the wheat from the chaff."
He said all the companies interested in taking over Satyam face the same issue of identifying the risks associated with imponderables. "There are a number of players in there and there are lots of rumours so the quicker it is done the better."
One of the major concerns that bidders have is how many of Satyam's key delivery staff remain at the company. "There is a real concern amongst all the bidders about which key delivery people will hang around," said Lewis.
The quicker the company is sold the sooner the buyer will be able to established what staff have remained and ensure they are retained.
The bidding process began last month with applications of interest due in by 12 Thursday March. The company asked for more detailed expressions of interest and proof from bidders of available funds to the value of $290m by 20 March before moving into the bidding process.