Satyam Computer Services Ltd. will on Monday only name the highest bidder for a stake in the company but not the final bid winner, the company`s chairman said Sunday.
You can be pretty certain that the final bid winner will not be named tomorrow (Monday). We will recommend the highest bidder to the Company Law Board (CLB) and they will have to approve it, Kiran Karnik said.
It may take a couple of more days to name the final winner. It`s up to the CLB to decide who will make the announcement, Mr. Karnik added.
Mr. Karnik said that the board expects to name the highest bidder by midafternoon Monday -- through a statement -- and won`t hold a press conference as widely expected.
Earlier in February, the CLB -- a semi-judicial body -- allowed Satyam`s board to issue preferential shares to an investor at par or at a premium.
As per the process laid down by the CLB, once an investor has been chosen, Satyam will have to take the CLB`s approval once again before the preferential shares are actually issued.
Mr. Karnik added that the Satyam board has the right to decide not to recommend the highest bidder, "if the highest bid is ridiculously low."
If the highest bid comes in at for example INR15-INR20, then we (the board) have the right to recommend the CLB not to accept the highest bid.
He declined to say what the process would be in case the highest bid wasn`t accepted by the board.
Shares in Satyam closed 3.3% higher on the Bombay Stock Exchange April 9. The markets were closed April 10.
The Hyderabad-based company, once India`s fourth-largest software exporter by revenue, is looking to sell as much as a 51% stake to a buyer who will infuse funds and help revive the company.
The company has been in turmoil after its founder, B. Ramalinga Raju, revealed in January he overstated its profits over several years and created a fictitious cash balance of more than $1 billion.
The government then intervened, sacking the company`s board and appointing six independent board members.
The new board has since been striving to keep Satyam`s business going, along with trying to find a buyer.
Indian software company Tech Mahindra Ltd. and engineering and construction firm Larsen & Toubro Ltd. are known to have shown interest in acquiring Satyam.
"Mr. Parekh had requested us about three weeks back that if Tech Mahindra is one of the bidders, he be allowed to recuse from the process of deciding the bid winner. And we have agreed," Mr. Karnik said.
Mr. Parekh is on the board of Mahindra & Mahindra, one of the founders of Tech Mahindra.
Recent media reports have said that billionaire investor Wilbur Ross and U.S.-based Cognizant Technology Solutions Co. are also in the fray.
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