Satyam board allows open auction

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New Delhi: Adding a new element for strategic sale to get higher value, Satyam announced on Thursday that it would conduct open auction in case there are one or more bidders within 90 per cent of the top financial bid.

"If one or more financial bids are at least 90 per cent of the highest bid, the Board will treat the highest bid as the floor price and conduct an open auction," the company said in a note to the market regulator Securities and Exchange Board of India (SEBI).

In such a situation, the top bidder as also those within 90 per cent would be asked to participate in the open auction and raise their bids, the company said.

The move would enable the company to enhance the value for stake sale, for which engineering giant L&T and Tech Mahindra are among those in the race.

It may be recalled that B K Modi's Spice group had withdrawn from the race last week alleging lack of transparency in the bidding process and demanded to know about the bidders as a pre-condition to enter the race again.

"If there is no bid which is at least 90 per cent of the highest bid, then the highest bidder will be declared the successful bidder," the note said seeking to modify the earlier bid conditions wherein there was no provision for open auction.

The company said the mechanism for the open auction would be notified to the bidders separately.

No immediate comments could be obtained immediately about the change in bidding conditions from those who are interested in buying the trouble-torn IT company, put on the block after the founder chairman B Ramalinga Raju admitted of financial fraud.

The change makes the auction process an open one where bidders after bidding for the company will be able to know each other's price and raise the offer accordingly.

A company official said that the aim is to get maximum value through the auction in the absence of a floor price.

"If one or more financial bids are at least 90 per cent of the highest bid, the Board will treat the highest bid as the floor price and conduct an open auction by asking the highest bidder and those bidders whose bids are at least 90 per cent of the highest bid, to raise their bids," the note said.