TechM to up Satyam stake via pref allotment

Open Offer Gets Poor Response Due To Spike In Satyam Share Price

 TECH Mahindra's open offer for an additional 20% in Satyam Computer Services has received a cold response from shareholders of the scamhit company as the offer was unattractive after the recent smart rally in Satyam shares. Tech Mahindra will now exercise the option of increasing its stake through the preferential allotment, as mentioned in the bidding document. After the preferential allotment, Tech Mahindra's stake in Satyam will rise to 42% from the current 31%, according to Tech Mahindra executives.
    "The number of shares tendered has been very miniscule," said an official with Kotak Mahindra Capital, which managed the offer. "We are awaiting exact figures from the registrar, which will be available on July 2." A few ADS holders are also learnt to have tendered their shares in the offer. On Wednesday, Satyam shares closed 3.7% up at Rs 73.55 on BSE, well above the open offer price of Rs 58 per share. The scrip has surged 30% in past month. TechM has deposited Rs 1,155 crore in the escrow account, which will be used for raising stake to 42-43% in Satyam, via the preferential allotment.
    Allotment of fresh equity shares will have to be completed within 15 days of the closure of the offer, according to current capital market norms.
    Although Tech Mahindra has the option of increasing its stake in Satyam to 51% through preferential allotment of shares, the company is unlikely to exercise it because it will involve an outflow of nearly twice the amount. Tech Mahindra has already pumped in Rs 1,756 crore to acquire a 31% stake in Satyam.

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