The Hindu Business Line : Spice Group board meet to review strategy for Satyam

New Delhi, April 2 Spice Group, which last week withdrew from the race for Satyam, on Thursday said it would hold a board meeting on Saturday to review its strategy, post the modifications in the bidding process for the Hyderabad IT company. This comes after Satyam on Thursday announced that second round of financial bidding, if any, would be conducted through open auction and not sealed bids.

“My office has received a letter but I have not seen the details. We have scheduled a board meeting on Saturday where we will decide on our strategy,” Spice Group, Chairman Dr B K Modi told Business Line.

Spice Group had last week pulled out of the race to acquire controlling stake in Satyam citing “transparency issues”. Spice Group had said that it would reconsider its position only if the bidding process is made transparent and “consistent with the orders of the CLB”. One of the key demands of the Spice group was “open auction” as opposed to sealed bids.

Meanwhile, a person involved in the bidding process said that the Board has decided to go for an open auction only in case of additional and subsequent round of price bids. “We are clarifying to the bidders that in case some financial bids are 90 per cent of the highest bid, the next round of financial bidding would be done via an open auction. This will mean that those select bidders will go through an open and competitive round of bidding across the table. The latest modification pertains to the procedure and is aimed at value maximisation.”

However, the source said that in the first round of price bids, parties would have to submit sealed bids. “The reason is that it would escalate the price bids for Satyam. Considering that there is no floor price, holding an open auction in the first round itself could have driven down the valuations. The current process will ensure that they start bidding from the top,” the source said.

Asked if the company would also relent to a demand by Spice Group that the names of shortlisted parties be made public, the source said, “Some bidders are not keen on such disclosures. Also, if the names are not known, the bidding is likely to be more aggressive.”

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