Indian telecommunications outsourcing firm Tech Mahindra won a bid to buy a controlling stake in Satyam Computer Services, the outsourcing giant nearly brought down in a $1 billion fraud.
Satyam board members and investment bankers from Goldman Sachs and Avendus Capital had planned to hole up all day in a room in Mumbai’s elegant Taj President hotel, poring over the offers.
But the exercise proved short.
Just three bidders came forward for what was once India’s fourth-largest outsourcing company, two Satyam spokespeople said Monday.
Shortly after noon — about three hours after the deadline for bids — Tech Mahindra emerged the clear winner.
“We hope this will infuse greater confidence and comfort amongst customers,” said Kiran Karnik, Satyam’s chairman.
Suitors faced the difficult task of valuing Satyam before its scrambled books had been untangled, and the wide range of bid prices — from 20 rupees a share to 58 rupees a share — underscored the uncertain valuation of the company.
Satyam, which is listed on the New York Stock Exchange, faces a spate of class action suits in the U.S. and a lawsuit on charges of fraud and forgery by Upaid Systems Ltd., a U.K. mobile payments company.
Tech Mahindra, which is owned by India’s Mahindra & Mahindra Ltd and British Telecommunications, agreed to purchase 31 percent of Satyam for $351 million through a new share issue, offering 58 rupees a share. It will also make an offer on the open market to buy an additional 20 percent of Satyam.
“This is a very major game changer for Tech Mahindra,” said Tech Mahindra chairman Anand Mahindra.
Tech Mahindra plans to finance the 28.9 billion rupee ($592.4 million) acquisition with 7 billion rupees ($143.5 million) in cash and the rest in debt.
Larsen & Toubro, one of India’s largest engineering conglomerates, which acquired a 12 percent stake in Satyam from late last…