It has been bothering me for some time if Satyam had eventually decided to swallow the poison-pill? When the Maytas news broke out on Dec 16, there has been a bunch of conspiracy theories going around.
One big possibility which I tended to incline slightly at that time was:
- the promoters stake was getting diluted because sale of mortgaged Satyam stock by lenders (which were mortgaged in the first place to invest in Real estate)
- the only way the promoters could keep management control was to do a MBO(management buyout) of the company (with help of PEs)
- and the best way to do it was to reduce the buyout rate
While the above seems a nice little corporate theatrical act, there are lot of obvious gaps in the story.
With news being surfaced about the controversial Dec 16 board meet, there are questions if Satyam really decide to take the poison pill to avoid takeover by IBM or HP? That Satyam may get acquired is not a new story. As early as 2003, there have been strong rumors of a EDS takeover. From 2005, it was a IBM takeover story - the rumors got only stronger.
- What if they werent rumors? What if one of the IT biggies was ready to swallow the Indian IT major?
- By taking a poison pill to invest in real estate and infrastructure, it was a smart way to keep the interested parties away as they would have no interest in these kind of ventures
- Or was the poison pill an act too? - to cover up siphoning of funds and/or lack of real cash?
Some time back I watched Barbarians at the Gate - the fall of RJR Nabisco. Maybe we will have our own movie soon once we figure out the screenplay.
(For the record, I HATE conspiracy theories of any sort).
One big possibility which I tended to incline slightly at that time was:
- the promoters stake was getting diluted because sale of mortgaged Satyam stock by lenders (which were mortgaged in the first place to invest in Real estate)
- the only way the promoters could keep management control was to do a MBO(management buyout) of the company (with help of PEs)
- and the best way to do it was to reduce the buyout rate
While the above seems a nice little corporate theatrical act, there are lot of obvious gaps in the story.
With news being surfaced about the controversial Dec 16 board meet, there are questions if Satyam really decide to take the poison pill to avoid takeover by IBM or HP? That Satyam may get acquired is not a new story. As early as 2003, there have been strong rumors of a EDS takeover. From 2005, it was a IBM takeover story - the rumors got only stronger.
- What if they werent rumors? What if one of the IT biggies was ready to swallow the Indian IT major?
- By taking a poison pill to invest in real estate and infrastructure, it was a smart way to keep the interested parties away as they would have no interest in these kind of ventures
- Or was the poison pill an act too? - to cover up siphoning of funds and/or lack of real cash?
Some time back I watched Barbarians at the Gate - the fall of RJR Nabisco. Maybe we will have our own movie soon once we figure out the screenplay.
(For the record, I HATE conspiracy theories of any sort).
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