Race heats up for Satyam
Monday could be the day
The race to buy Satyam is heating up and the board could make a decision as early as this Monday.
There are believed to be four bidders left in the race to buy the troubled outsourcer. These include building firm Larsen & Toubro, Tech Mahindra, Cognizant Technology and private equity investor Wilbur Ross.
The four will be taking a gamble on any bid because Satyam is unable to provide proper accounts. KPMG are in the midst of sorting out the mess left by company founder Ramalinga Raju, who admitted massively inflating turnover and profits at the offshoring firm.
The Indian government took over the board of Satyam in order to stop its total collapse when the scale of the fraud emerged. The company has also been banned from bidding for World Bank contracts over accusations of bribery.
The bidders have been conducting due diligence as best they can - Satyam has given them access to the data it has. But it was India's fourth largest outsourcer, so could be a bargain for the buyer.
Satyam hopes to receive all four bids on Monday and could decide that day if one bid is substantially larger than the rest. But the process could take longer - if the second highest bid is 90 per cent of the highest bid then there will be an open auction process. ®