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Satyam announces winning bidder | Satyam announces winning bidder |
(about 1 hour later) | |
Satyam, the fraud-hit Indian IT firm, says local company Tech Mahindra is to buy a controlling stake in it. | Satyam, the fraud-hit Indian IT firm, says local company Tech Mahindra is to buy a controlling stake in it. |
Tech Mahindra put in the highest offer in sealed bids opened on Monday by Satyam's government-appointed board, a company spokeswoman said. | Tech Mahindra put in the highest offer in sealed bids opened on Monday by Satyam's government-appointed board, a company spokeswoman said. |
It agreed to buy a 31% stake at 58 rupees ($1.16; 79 pence) a share, then make a public offer to buy 20% more. | It agreed to buy a 31% stake at 58 rupees ($1.16; 79 pence) a share, then make a public offer to buy 20% more. |
Satyam has struggled since founder Ramalinga Raju said in January that its profits had been overstated for years. | Satyam has struggled since founder Ramalinga Raju said in January that its profits had been overstated for years. |
He and eight others are facing charges of criminal conspiracy, cheating and forgery for allegedly stealing millions of dollars from the company. | |
Shares rise | Shares rise |
The government hopes that the sale of a controlling stake will restore investor confidence in Satyam, which has lost 80% of its market value since January. | The government hopes that the sale of a controlling stake will restore investor confidence in Satyam, which has lost 80% of its market value since January. |
Shares in both Satyam and Tech Mahindra rose strongly on the news. At one point, Tech Mahindra's shares were trading as much as 25% higher on the day before falling back. | Shares in both Satyam and Tech Mahindra rose strongly on the news. At one point, Tech Mahindra's shares were trading as much as 25% higher on the day before falling back. |
Tech Mahindra beat Indian engineering firm Larsen & Toubro, which had already built up a 12% stake in Satyam and had been seen as the front-runner in the auction. | Tech Mahindra beat Indian engineering firm Larsen & Toubro, which had already built up a 12% stake in Satyam and had been seen as the front-runner in the auction. |
Satyam had been one of the biggest players in the booming Indian IT software market, supplying back-office services to firms from around the world, including General Electric and Qantas Airways. | Satyam had been one of the biggest players in the booming Indian IT software market, supplying back-office services to firms from around the world, including General Electric and Qantas Airways. |
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