The buyer of Satyam Computer Services, Tech Mahindra on Wednesday (April 22) announced an open offer to acquire an additional 20 percent stake in the scam-hit IT company. The market regulator SEBI's relaxation of takeover code has allowed to go for an open offer of acquisition. SEBI on Wednesday exempted Satyam from providing the status of corporate governance.

 

The relaxation in takeover code will keep Satyam away from providing due diligence certificates by merchant bankers and disclosing its latest financial data in the offer document. If everything goes in favour of Tech Mahindra, it will have 51 percent stake in Satyam. Tech Mahindra is planning to hold 19.9 crore shares in the Hyderabad-based company at a price of Rs 58 per share.

 

A subsidiary of Tech Mahindra, Venturbay Consultants will make the offer to acquire the stakes in Satyam Computer. After the acquisition, Venturbay Consultants will become the owner of Satyam. In order to acquire a 31 percent stake in Satyam through preferential allotment, Tech Mahindra will initially invest Rs 1,756 crore. After that, an amount of Rs 1,155 crore will be spent to buy the additional 20 percent equity in Satyam through the proposed open offer.

 

Under SEBI's acquisition guidelines, Tech Mahindra will be allowed to raise the open offer price, seven days before its closure. The company will buy the additional shares through a second preferential allotment if the offer is not fully subscribed. After acquiring the 51 percent shares, Tech Mahindra will enter into lock-in period of three years, which means the company will not be allowed to sell Satyam’s assets for two years or discontinue its main business.