The Hindu Business Line : Satyam may launch shares buyback to appease investors

NEW DELHI: Having infuriated investors with a deal that would have propped up companies of its promoters, Satyam Computers is now looking to mollify shareholders through rewards such as a share buyback or dividend payout.

“We will take the decisions in few days. In the light of whatever has happened, buyback is one of the option... (it) being one of the investor friendly measures that we may consider. We are also discussing whether it will be dividend or buyback,” Satyam' s CFO Mr Srinivas Valdamani said.

The company yesterday announced a $1.6 billion deal to acquire Maytas Properties and Maytas Infrastructure, companies run by Satyam chief Mr Ramalinga Raju's sons B Rama Raju and Teja Raju.

Investors' opposition forced Satyam to call off the deal today. Valdamani said the company has a cash surplus of $1.1 billion and it was meant for inorganic and organic growth and corporate actions like giving dividends and bonus share or a buyback.

Announcing the decision to call off the acquisition “in light of the setback received from the investors’ community,” Mr Raju said earlier today: “We have been surprised by the market reaction to this decision even though we were quite positive about the merits of the acquisition.”

The reversal comes within a day of Satyam Board approving the decision to acquire Maytas Properties for $1.3 billion and 51 per cent stake in Maytas Infrastructure for $0.3 billion.

Some institutional investors such as Reliance Mutual Fund, SBI Mutual Fund, Templeton Mutual Fund and CLSA, were even threatening to resist the deal.

Satyam shares were down 31.24 per cent at Rs 155.75, while its ADR was down 54.50 per cent at $5.7 a share in the US market. - PTI

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