TechM proposal: Satyam board meet tomorrow

The board of Mahindra Satyam will meet on July 10 to clear the proposal of Tech Mahindra seeking a second round of preferential share allotment to hike its stake in the newly acquired company to about 43 per cent after an open offer evoked a weak response.

"The board is meeting on July 10 to consider the proposal of Tech Mahindra to raise its stake through preferential allotment; that is the main agenda of the meeting," Mahindra Satyam chairman Kiran Karnik told PTI.

A Tech Mahindra spokesperson said: "Our open offer was for acquiring additional 20 per cent, which is around 199 million shares, of Satyam. But since the share prices have gone up, the open offer has not been successful.

"Now we will go back to Satyam with a request for a preferential offer. This will bring our stake in the firm to approximately 42.7 per cent," he added.

Earlier the Company Law Board had authorised Mahindra Satyam to allot 19.86 crore equity shares of Rs 2 each to Venturebay, the SPV of Tech Mahindra, which acquired a 31 per cent stake in Satyam Computer Services (now Tech Mahindra) in the first round of preferential allotment.

Mahindra Satyam had moved CLB after Venturebay failed to get 20 per cent of Satyam's shares from the open market.

Meanwhile, on the government's request to recall its six directors from the board of IT firm Mahindra Satyam, the CLB Chairman said it would be considered later.

The CLB is likely to pass the order on recalling the government's nominee on the board of Mahindra Satyam after the Hyderabad-based company completes its second round of preferential allocation of shares, which will take its stake upward from 31 per cent.

Following the CLB order on April 16, Tech Mahindra was allotted 31 per cent equity shares of the then Satyam Computer at Rs 1,756 crore (Rs 17.56 billion). In addition to that the CLB had directed Venturebay to take 20 per cent shares from the open market.