UK incumbent BT is looking to sell its 30.83% stake in Indian software company Tech Mahindra, according to two sources cited by the Economic Times.
Tech Mahindra is a joint venture between BT and Mahindra Group, an Indian conglomerate.
Private equity…
UK incumbent BT is looking to sell its 30.83% stake in Indian software company Tech Mahindra, according to two sources cited by the Economic Times.
Tech Mahindra is a joint venture between BT and Mahindra Group, an Indian conglomerate.
Private equity firms Providence Equity Partners, Apax Partners and Goldman Sachs Private Equity Group have reportedly expressed interest in acquiring the stake, which is likely to be valued at about US$830m. This is a 30% premium over the current market price for the stake sale.
A potential transaction would also involve BT’s stake in Satyam Computer Services, now known as Mahindra Satyam, the report wrote. The Economic Times explains 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, 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”.
By the end of April, US telco AT&T had sold out of the 8.07% stake in Tech Mahindra, with Life Insurance Group buying the majority of it for around US$145m. Citigroup ran the sale.
This was a month after AT&T, a significant client of Tech Mahindra, acquired its stake for US$34m via an off-market transaction through a share option signed in 2005.
Tech Mahindra could not be reached for comment.
