Satyam gets takeover offers; board meeting on Jan 22-23

Satyam Computers on Tuesday appeared headed for a possible sale as two leading corporates - Essar and L&T - are believed to have evinced interest in buying whole or part of the crisis-hit IT firm, while a director said offers have come from both Indian and foreign companies.

Engineering major Larsen and Toubro's chief AM Naik approached the central government on the Satyam issue, while Essar group has also submitted a proposal entailing a buyout of the IT firm's BPO arm.

L&T is present in IT business through L&T Infotech and has recently purchased a little over four per cent stake in Satyam, while Ruias-promoted Essar's presence in IT-related business is through its outsourcing arm Aegis.

After meeting with corporate affairs minister Prem Chand Gupta, secretary Anurag Goel and other officials here, Naik said he was concerned about his investment in Satyam, but did not give any further details.

Sources close to the development said L&T was willing to explore all available options to safeguard its interest, but it was a bit too early to reach any final decision as Satyam's accounts are being scrutinised for authenticity.

Asked if the company had informed the government about its interest in Satyam, whose founder Ramalinga Raju recently disclosed a Rs 7,800 crore fraud, an L&T spokesperson said: "No comments."

Asked if L&T was looking for a strategic fit in Satyam, he said: "We have a portfolio investment through L&T Capital."

Sources said Essar has submitted a proposal for Satyam's BPO business.

Separately, Satyam director Tarun Das said the company has been approached for buyout by foreign and Indian IT firms. Unconfirmed reports suggest that the company might soon appoint investment bankers to advise on a merger or sale.

Another board member Deepak Parekh had said that option of merger was always open for the company.    

"Satyam has got enormous fixed assets, human resource and technology assets. So, it is a very strong company. The board has not yet discussed the issue of looking for a buyer... But I have to truthfully say, we have been approached by potential buyers", Satyam's government-appointed director Das said.

Asked if the buyers were MNCs or big Indian IT companies, Das said, "Both." The suitors are, however, not among the top IT companies of India, he clarified.

"We have not decided on anything," L&T chief financial officer YM Deosthalee said, adding that "the situation is so fluid... We need to check many things."

"We have not appointed any firm to advice us on the buyout matter, nor Nomura," Deosthalee said when asked if L&T has mandated Japan's Nomura to advice it on the matter."

The new board of Satyam, which has been constituted by the government after the company plunged into a crisis, is scheduled for a two-day meeting later this week on January 22-23. The board has met twice so far, first on January 12 when there were just three members and then on January 17 after addition of three more directors.

Das said the company is focussing on keeping the business running and in that context appointment of CEO and CFO "are high priorities for the board"  which is meeting for two days this week to discuss all these issues.

"The board is reaching out to the clients, having conference calls with them at the board level. We are in touch with customers. Clients are reported to be concerned, naturally. We are reaching out to them to assure them as we have excellent people, engineers, technology to service them", he said. 

Sources said Essar group firm Aegis BPO has submitted an expression of interest for acquiring the BPO business of the beleaguered Satyam Computer Services.

Sources said Aegis submitted the EoI recently as the Essar group is trying to expand its BPO business. When contacted, a company spokesperson declined to comment.

Sources said Aegis, which recently acquired the Philippines' back-office outsourcing group PeopleSupport Inc for USD 12.50 a share in a deal worth USD 250 million, has completed the transaction and now is looking at adding more companies for synergy.

Aegis BPO has annual revenue of about USD 500 million, and 15-odd Fortune 500 companies among its global clients. Satyam BPO has 3,500-odd employees and international clients. Aegis BPO employs around 32,000 employees globally.

Both Aegis and Satyam BPO work with companies in telecom, banking, finance and insurance. Satyam BPO's biggest international clients reportedly include BellSouth, Verizon and GlaxoSmithKline.