Satyam to Pick Winning Bid on April 13, Parekh Says

April 4 (Bloomberg) -- Satyam Computer Services Ltd., the software provider at the center of India’s biggest corporate fraud inquiry, will announce the winning bid for the company on April 13, director Deepak Parekh said today.

“We met the bidders yesterday,” Parekh said in a telephone interview. “The original date for the bids was April 9, now that has been moved to the 13th.”

Larsen & Toubro Ltd., India’s largest engineering firm, and Tech Mahindra Ltd., the software-services provider partly owned by BT Group Plc, may make their offers this month to buy a controlling interest in Satyam. Satyam’s state-appointed board is selling a 51 percent stake in the company to restore investor confidence and stem client and employee defections after founder Ramalinga Raju said Jan. 7 he inflated $1 billion in assets.

The company will be sold via an open auction if there is a bid that is 90 percent of the highest offer, the Hyderabad-based company said in a statement on April 2.

The highest bid will be treated as the winner if no other bid is at least 90 percent of it or will be treated as the floor price for an open auction. Bidders who quote 90 percent or more of the top bid will be allowed to raise their offers, with the highest price at the auction declared successful, Satyam said.

The bids will be opened at 9 a.m. in Mumbai, Parekh said.

Buyers “have sought additional data and today, tomorrow, we’ll put it up on the” company’s Web site, Parekh said. “We’ll announce the winner once we open the bids.”

Satyam Bidders

International Business Machines Corp. and one more bidder had begun due diligence on Satyam, CNBC-TV18 network reported on March 26, without saying where it got the information.

IBM, Fidelity Investments and buyout firm KKR Financial Holdings LLC are among the bidders, the Economic Times reported on March 14, citing people close to the development it didn’t identify.

Prashanth Balarama, a Bangalore-based spokesman for IBM and KKR spokeswoman Kristi Huller declined to comment on the report at the time.

Billionaire investor Wilbur Ross’ firm WL Ross & Co. is seeking to purchase Satyam, the Hindu Business Line reported March 31, citing unidentified people close to the development.

Ross said April 1 he was barred by Indian rules from Talking about any interest he has in buying Satyam.

Cognizant Technology Solutions Corp. may bid for Satyam, the Business Standard reported today, citing an unidentified banker familiar with the developments. Cognizant may team up with Wilbur Ross for the bid if the expected price is higher than what it is willing to pay, the newspaper reported.

Customers, Employees, Lawsuits

Buying Satyam will gain the winning bidder customers including Cisco Systems Inc. and Nestle SA and a workforce of about 50,000 people. Buyers face the challenge of valuing Satyam before the company restates its financial statements and making provisions for liabilities from investor lawsuits in the U.S.

Satyam wants to complete the sale before India’s general- elections start on April 16, the Financial Times reported March 31, citing unidentified people familiar with the matter. The company, which said on March 24 that it would name the winning bid by April 30, declined to comment, the FT said.

Satyam rose 0.6 percent to close at 39.9 rupees in Mumbai trading on April 2, valuing the company at 26.9 billion rupees ($534 million). The stock has declined 78 percent since Raju’s disclosure, compared with a 0.1 percent gain in the benchmark Sensitive Index in the period.