MSat to merge and move HQ to Pune

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posted on 12 years ago — updated on 1 second ago

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HYDERABAD: APs largest software services company Mahindra Satyam (MSat) will soon be merged into Pune-based Tech Mahindra Ltd, ne..

HYDERABAD: AP’s largest software services company Mahindra Satyam (MSat) will soon be merged into Pune-based Tech Mahindra Ltd, nearly three years after the latter took over the scam-hit company in April 2009. After the merger MSat will shift base to Pune, and cease to be a Hyderabad-headquartered company.The boards of Mahindra Satyam and Tech Mahindra will meet in Mumbai Wednesday to discuss the road map for the merger and other aspects such as the share swap ratio. According to sources, the merged entity may have a new brand identity, possibly Mahindra Technologies, or retain its existing name, Tech M. Sources also said the board members are considering a 9:1 share swap ratio, nine shares of MSat for every one of Tech M. “The general multiple of the last-closed share price of both companies’ scrips comes to about 8.8:1,” said a company source. “The board may also consider the last six months’ average share price.” The Tech M scrip rose over 5 per cent on BSE to close at Rs 648.35, while MSat went up over 4.5 pc to close at 74.15. “MSat will be merged into Tech M and the respective boards will discuss the share swap ratio,” Vineet Nayyar, chairman of MSat and vice-chairman of Tech M told Express. He, however, denied the possibility of having a new brand identity in the near future. Following the boards’ approval, the companies will have to seek approval from market regulator Securities Exchange Board of India (Sebi), the High Courts of AP and Maharashtra. It also has to be passed at both companies’ annual general meetings. The process is expected to take six to eight months. The joint entity of MSat and Tech M will be the fifth largest software services provider by revenue. Morgan Stanley India and JP Morgan Chase & Co are the bankers for the proposed merger.In separate filings with the stock exchanges, both MSat and Tech M said their boards will consider amalgamation of MSat, Venturbay Consultants, C&S System Technologies, CanvasM Technologies and Mahindra Logisoft Business Solutions with Tech Mahindra.