The government on Thursday said any prospective buyer for the crisis-ridden Satyam Computer Services will have to make an open offer of 20 per cent.
"Whether it (stake to be offered in Satyam) is 31 per cent or 26 per cent, anybody coming in would have to make an open offer of 20 per cent in the market. Then the number of shares with the person or with the bidder could be higher than 31 per cent or 26 per cent. So that is not an issue," Corporate Affairs Minister P C Gupta told reporters in New Delhi.
SEBI earlier amended the Takeover Code that allows companies, whose boards have been superseded by the government, to seek exemption from applicability of provisions of takeover regulations, such as a mandatory open offer and 26-week average price. The open offer allows existing shareholders to exit the company by selling equity to the acquirer at a pre-determined price.
On the issue of management control given only in cases of the bidder acquiring 51 per cent, Gupta delinked both the issues saying, "How many companies in India are managed by our corporate sector with a 51 per cent shareholding?"
Asked if the reserve price will be linked to the net worth of the company, he said, "Let the board of Satyam first make up its mind. They have international consultants. They are the best experts to suggest."
He said the bidder does not have to be a global player; it can be an independent entity also.
"This would be a transparent process without any favour or disfavour to any bidder, whatever is best in the interest of the company and shareholders... It does not have to be a global player, it can be an independent player also. Preference should be given to those who have a good corporate governance record, administrative record. Satyam is a company which has international operations," he said.
The Company Law Board has already authorised the Satyam board to make a minimum 26% preferential allotment to a strategic investor and raise the company's capital base to Rs 280 crore (Rs 2.8 billion) from Rs 160 crore (Rs 1.6 billion), or to 140 crore (1.4 billion) shares from 80 crore (800 million) shares.
One of the prospective bidders B K Modi had earlier disfavoured the idea of an open offer and pitched for a 51 per cent stake sale in the company.
"Only (an) offer of 51 per cent holding will enable the strategic partner (to) have majority control over the company. There is no guarantee that public shareholders will tender 20 per cent in the open offer," he had said.
