UK incumbent BT could sell a 7% stake in Indian software company Tech Mahindra to its parent company, the carmaker Mahindra & Mahindra, according to sources familiar with the matter cited by Bloomberg.
In early October, it was reported that the UK…
UK incumbent BT could sell a 7% stake in Indian software company Tech Mahindra to its parent company, the carmaker Mahindra & Mahindra, according to sources familiar with the matter cited by Bloomberg.
In early October, it was reported that the UK company was looking to divest part or all of its 30.83% stake in Tech Mahindra. Tech Mahindra is a joint venture between BT and Mahindra & Mahindra, which belongs to Indian conglomerate the Mahindra Group.
Private equity firms Providence Equity Partners, Apax Partners and Goldman Sachs Private Equity Group have also reportedly expressed interest in acquiring the stake, which is likely to be valued at about US$830m.
BT has appointed Credit Suisse to manage the sale, the sources told Bloomberg.
A potential transaction would also involve BT’s stake in Satyam Computer Services, now known as Mahindra Satyam, local reports stated a few weeks ago. The Economic Times explained that Tech Mahindra holds 42.66% in Mahindra Satyam and that the two companies are expected to merge in the near future.
The company has restarted discussions for the sale after getting a clearer picture on Mahindra Satyam’s financials. Tech Mahindra acquired Satyam Computer Services in April 2009, a few months after chairman Ramalinga Raju confessed that Satyam’s accounts had been falsified.
In an email to TelecomFinance early October, BT wrote: “BT does not comment on rumour and speculation. BT has operations and investments worldwide which we regularly review. India remains a critical market both for BT and our customers, and we expect to continue developing both the operational network and service presence that we have established over a number of years.”
Apax Partners and Tech Mahindra declined to comment on the speculation, while Providence did not respond to emails before going to press.
