Tech Mahindra finally emerged as the winner to take over crisis-ridden Satyam Computer Services. Reacting to the news of Tech Mahindra winning the Satyam bid, Som Mittal of industry body National Association of Software and Services Companies (NASSCOM) said the deal was synergistic for both companies. "All three bidders were worthy," he said, commenting on the bid process.
Awaiting official note: CLB
A Company Law Board spokesperson said that it still hasn’t received any official confirmation of Tech Mahindra winning the Satyam bid. "The approval for the stake sale will given within 24 hours after getting official note."
Terming it a positive development, JR Varma, Former Member of Securities and Exchange Board of India (SEBI), said the Tech Mahindra winning the Satyam race was not a surprise. "The bid price [at Rs 58 per share] has come within the expected range," he said. "There will have to be some realignments of common clients."
Winner faces challenge: Forrester
Sudin Apte, head of Forrester Research, said the move is a good expansion plan for Tech Mahindra. However, Apte said there is a possibility that dissatisfied clients at Satyam may want to shift. "The main challenge for Tech Mahindra is to maintain value proposition to Satyam clients," he said.
"Tech Mahindra will get USD 800 million to USD 1 billion revenues over six-eight months," Apte said. "But it would be difficult for Tech Mahindra to revive Satyam completely."
'Tech Mah needs to iron out conficts of interest'
Legal expert Akil Hirani of Majmudar & Co said Tech Mahindra should cross the 51% threshold in terms of holding Satyam. "Tech Mahindra should get 20% or more subscription to open offer," he said.
Hirani added that a potential merger of Tech Mahindra and Satyam may be possible though a merger, if it does take place, would happen only after a year.
Hirani though cautioned that there was a need to address conflicting issues between Satyam and Tech Mahindra. "There will be conflict of interests in case of common clients between both companies," he said.
Good for Tech Mahindra: Wipro
Suresh Senapathy, CFO of Wipro, said he was glad the Satyam bid process was successfully completed. "Satyam will also bring in non-telecom expertise for Tech Mahindra," he said.