Satyam hires Merrill Lynch to review its ‘strategic options’

Satyam Computer Services said that it hired investment bank DSP Merrill Lynch to review its “strategic options to enhance shareholder value,” a hint that the Indian outsourcer is looking to either be acquired or to sell a significant stake to an outside investor.
At the same time Satyam announced it hired DSP Merrill Lynch, the company also delayed a board of directors meeting, previously scheduled for today, until January 10. The canceled meeting was intended to review plans for a share buyback.
On January 10, Satyam’s board will announce its recommendations on options available to the company and review the implications of selling off shares held by the company’s largest shareholders, it said in a statement. The company will also announce steps to improve its corporate governance, a key issue in light of a World Bank announcement last week that Satyam will be excluded from future contracts for providing “improper benefits” to bank employees and failing to document fees paid to subcontractors.
Last week, Satyam issued a statement demanding an apology from the World Bank, but did not dispute allegations made by the bank.
Corporate governance is also an issue following investor criticism over Satyam’s plans to expand into property and infrastructure.
On Dec. 16, Satyam announced plans to acquire Matyas Property and take a controlling stake in Matyas Infrastructure, 2 companies in which Satyam’s founders hold significant stakes, valuing the deal at US$1.6 billion. However, Satyam backed down from those plans the following day, citing “feedback received from the investor community.”

This entry was written by , posted on December 29, 2008 at 3:49 am, filed under Real Estate News and tagged , , , , , , , , , , , , , , . Bookmark the permalink. Follow any comments here with the RSS feed for this post. Trackbacks are closed, but you can post a comment.

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