July 2 (Bloomberg) -- Tech Mahindra Ltd. plans to raise its stake in Satyam Computer Services Ltd. to about 44 percent as it tightens control and reorganizes the Indian software-services provider following a $1 billion fraud.
The company may buy new Satyam stock after receiving “no significant” acceptances from shareholders for an 11.5 billion rupee ($240 million) tender offer, Chief Financial Officer Sonjoy Anand said in a telephone interview yesterday. Spending the same amount on new shares would raise Tech Mahindra’s stake to “a little less than 44 percent” from 31 percent, he said.
Satyam would gain funds as it seeks to retain clients and win new orders following former Chairman Ramalinga Raju’s January admission that he overstated assets by $1 billion. The software provider’s shares have jumped 55 percent since Tech Mahindra agreed to buy control of the company from a state- appointed board on April 13.
“They are showing more commitment,” said Tarun Sisodia, a Mumbai-based analyst at Anand Rathi Financial Services Ltd. “Down the line, if they merge Satyam with Tech Mahindra, the money will come back.”
Satyam rose 3.2 percent yesterday to close at 73.25 rupees in Mumbai trading. Tech Mahindra climbed 2.1 percent to 747.55 rupees, while the benchmark Sensitive Index gained 1.1 percent.
The number of shares tendered and accepted in the offer that expired yesterday is insignificant, Anand said. The figures will be disclosed on or about July 8, Tech Mahindra said in a statement to the Bombay Stock Exchange yesterday.
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