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How Tech Mahindra won the Satyam bid

April 13, 2009

If, upon closing of the public offer, Tech Mahindra will have acquired less than 51% of the enhanced share capital pursuant to the preferential allotment and the public offer, Tech Mahindra will have the option to subscribe to additional newly issued shares of the company, such that the shares acquired through the preferential allotment, the public offer and the subsequent preferential allotment, if any, will be not more than 51% of the enhanced share capital after giving effect to the issuance of the additional shares.

According to sources, Cognizant Technologies had not put in its bid to acquire stake in the firm. When contacted the company spokesperson declined to comment saying "it (Cognizant) doesn't comment on speculation."

Earlier reports said that Nasdaq-listed Cognizant Technology Solutions was in the race to acquire Satyam and had an "arrangement" with private equity firm Wilbur L Ross & Co.

Cognizant was started by Satyam and Dun & Bradstreet Corporation (D&B) in 1994. D&B had a 76 per cent stake in that venture, called Dun & Bradstreet Satyam Software (DBSS), while Satyam held a 24 per cent stake. D&B bought out the stake from Satyam after the second year of operations and Cognizant was formed.

Image: Cognizant Technology Solutions CEO Francisco D'Souza. | Photograph: Rediff Archives