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The share swap, in the event of a merger now, will result in losses to the shareholders as the share price is now around Rs 70. The shareholders said many bought shares when the price was around Rs 400 upwards.
“The normal merger formulae for two companies in good health will work well but not in this case. Satyam’s valuations are low now. Satyam and Tech Mahindra are not on the same standing,” pointed out a shareholder at the annual general meeting in Hyderabad.
Replying to the concerns of shareholders, Mahindra Satyam chairman Vineet Nayyar said merger was always on the cards and the shareholders should leave its timing to the management.
“Satyam was bought with the intention of merging with Tech Mahindra. Satyam’s strength lies in ERP solutions while Tech Mahindra has firm hold in the telecom vertical,” he clarified.
He, however, assured the shareholder of a fair value for Satyam shares. “Valuators will assess the shares of both the companies taking into account the present as well as future earning potential while arriving at the share swap ratio,” he said.
“Satyam, when Mahindra bought was a patient in the ICU. A 15 per cent Ebitda margin for the company, which many companies aspire to reach, is an indication that the company is healthy now,” he said.
Mahindra Satyam will surely consider relisting with the NYSE once again after it is merged with Tech Mahindra, the chairman said. Mahindra Satyam would now look at ways at recovering some of the losses caused to the company by Satyam founder B Ramalinga Raju through the accounting fraud, Nayyar.
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