Tech Mahindra spurts on plans to amalgamate Satyam Computers

Tech Mahindra is currently trading at Rs. 664.20, up by 15.85 points or 2.44% from its previous closing of Rs. 648.35 on the BSE.

The scrip opened at Rs. 651.00 and has touched a high and low of Rs. 680.00 and Rs. 649.40 respectively. So far 434376 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 797.70 on 27-Jul-2011 and a 52 week low of Rs. 524.20 on 30-Sep-2011.

Last one week high and low of the scrip stood at Rs. 680.00 and Rs. 604.00 respectively. The current market cap of the company is Rs. 8412.95 crore.

The promoters holding in the company stood at 70.90% while Institutions and Non-Institutions held 20.14% and 8.97% respectively.

Tech Mahindra has approved the amalgamation of Satyam Computer Services with itself. The exchange ratio for the merger of Tech with Satyam has been pegged at 2:17, i.e. 2 shares of Tech Mahindra for 17 shares of Satyam, which implies that shareholders will get one share of Tech Mahindra for every 8.5 shares of Satyam. Tech Mahindra will issue 10.34 crore new shares, thereby increasing its outstanding shares to 23.08 crore and its equity capital to Rs 230.8 crore.

The merger between technology outsourcing firms Mahindra Satyam and Tech Mahindra will lead to the constitution of a new management structure to guide the combined entity, thereby creating new off shore leader, which would be fifth largest player in the listed IT services space, with combined revenues of approximately $2.4 billion, approximately 75,000 plus strong work force and 350 plus active clients, across 54 countries. Further towards the development, Mahindra Satyam is likely to hire a firm to advise the combined entity on operational issues and matters pertaining to strategy and human resources.

On a pro-forma basis, the Mahindra Group will own 26.3% in the combined entity, British Telecom will own 12.8%, 10.4% will be held as treasury stock, 34.4% to be held by the public shareholders of Mahindra Satyam and the balance 16.1% will be held by the public shareholders of Tech Mahindra.

The board of directors of both the company in their meeting held on March 21, 2012, approved the proposal to merge Mahindra Satyam with Tech Mahindra along with certain wholly owned subsidiaries of Mahindra Satyam and Tech Mahindra.