Satyam Computer Services has found a new home in Tech Mahindra. It will pay Rs 58 a share, or a premium 23% premium over Friday’s close, to acquire a 31% stake in Satyam. That speaks for Satyam’s value even after all the fudging of books or for Tech Mahindra’s desire to acquire Satyam. Either way, it’s an outcome that will please Satyam’s shareholders, board and the government itself. The shareholders got a good price, the board has managed the sale process without any glitches and the government would be happy that it remains in Indian hands.
Companies
Satyam sale enters final stage today
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The board is expected to open financial bids on Monday submitted by a few bidders remaining at the last stage. Among them are believed to be Tech Mahindra, L&T, Cognizant Technologies and some private equity funds. If the gap between the first and losing bids is less than 10%, then there will be open auction. The highest bidder in the auction will be declared the new owner.
Finance+Markets
Will Pfizer India make an open offer to Wyeth’s shareholders or will the two merge?
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Pfizer is acquiring Wyeth for $68bn in a cash and stock transaction. Both companies have listed subsidiaries in India, Pfizer Limited and Wyeth Limited. The first point of interest for Indian shareholders will be whether this will result in an open offer for Wyeth. It will not, because the transaction has been styled as a merger agreement, in which Pfizer will pay the consideration in cash and stock. Under the Sebi Takeover regulations, an acquisition by way of merger will be exempt from the compulsory open offer clause.
Companies
Oil PSUs get Rs 21,942 crore bonds
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The government yesterday issued bonds worth Rs 21,942 crore to the oil marketing companies to compensate for the losses incurred by them. IOC got about 54% of the total bonds while BPCL was issued nearly a fourth and HPCL the rest. These bonds have a coupon of 6.9% and mature in 2026. Since the oil marketing companies have little leeway in fixing prices of petroleum products resulting in losses, especially on the sale of kerosene and LPG.
Companies
Oil PSUs to spend 2% of net profit on CSR
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The petroleum ministry announced that public sector units in the oil sector –like Gail, HPCL, ONGC, BPCL and IndianOil- have resolved to spend at least 2% of their net profits on corporate social responsibility projects. There was a joint meeting of the Minister for Petroleum & Natural Gas, Murli Deora, chairmen of oil PSUs and the petroleum secretary, RS Pandey.
Economy+Policy
RBI’s credit policy stands still
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The Reserve Bank of India announced its third quarter review of the monetary policy today, disappointing the rate-cut hopefuls by leaving all key benchmarks unchanged. In the past few months, the central bank has provided enough leeway, by reducing interest rates and adding to cash in the banking system, for banks to start lending again.
Companies
Vedanta to delist Madras Aluminium (Malco)
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Vedanta Resources Plc has decided to delist Madras Aluminium Company (Malco). The Anil Agarwal promoted Vedanta owns 80% of Malco’s equity and has sent a proposal to its board to approve a delisting proposal under Sebi’s delisting guidelines. It will have to make an offer to Malco’s shareholders through a reverse book-building process. It will set a floor price while shareholders will be free to offer shares at a higher price. The price determined through the book-building process will be the final price, which Vedanta is free to accept or reject. Continue Reading →
Companies
Siemens’ IT unit SISL sold at low valuation
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Siemens Information Systems Ltd (SISL) seems to have been sold at a relatively cheap valuation, by Siemens, to a privately owned company of Siemens AG. Siemens said that SISL, which had revenues of Rs 994 crore and PBT of Rs 73 crore for the year ended September 2008, has been valued at Rs 449 crore.
Companies
Wipro barred from World Bank contracts
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“Wipro discloses vendor status with World Bank”. That’s the headline of the release issued to the Bombay Stock Exchange. But for Satyam’s run-in with the World Bank, few would have opened the attachment. Its contents are a shocker The World Bank has declared Wipro ‘ineligible’, in June 2007, to bid for direct contracts for four years ending in 2011. Ineligible is a mild term for a ban, which is what it is. Wipro’s disclosure shows a can of worms waiting to be prised open in several parts of corporate India. Continue Reading →
Companies
Satyam’s board dismissed, government nominated board to step in after a week
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The government acted in time to stop tomorrow’s board meeting of Satyam Computer Services. Otherwise, a 3-member board would have met tomorrow, to consider the resignations of its chairman and managing director and discuss options before the company. This is the same board, down from its original strength of nine, which has presided over the worst corporate scam in the new millennium in India. Any decision of this board would have been viewed with suspicion.