Tuesday, January 06, 2009

No truth in merger with Tech Mahindra: Satyam

MUMBAI - Satyam Computer Services denied media reports on rival software services firm Tech Mahindra offering to merge with the IT major.

In a statement to the Bombay Stock Exchange, Satyam clarified that "there is no truth in the news item which appeared in the financial daily."

Shares of Tech Mahindra had surged more than 12 per cent Tuesday on the media report that it is considering an all-stock merger with Satyam Computer Services. At 2:15 pm, the stock eased most of its gains and was trading at Rs 293.70, up 3.56 per cent.

According the financial daily, Tech Mahindra was interested in acquiring Satyam as part of its strategy to evolve from a telecom industry focused IT firm to a full fledged IT services company spanning across all sectors. Earlier reports mentioned that HP, IBM, Mindtree would also be interested in acquiring Satyam.

Satyam has been going through a bad phase which has resulted in its share value erode rapidly for the past few days. The company came into troubled waters when it emerged that the board had approved a proposal to invest in a real estate firm owned by children of Raju, one of the main promoters of Satyam. Following strong negative response to the move, Satyam had to eventually call off the deal. Satyam shares were trading up 5.33 per cent at Rs 175.80 after rising to a high of Rs 178.95 in trade so far.