BT waits Satyam merger to offload from Tech Mahindra

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Mumbai: BT, a telecom conglomerate, is waiting for the merger between Tech Mahindra and Mahindra Satyam before offloading a large portion of its stake in Tech Mahindra. Divesting its stake in the merged entity could get BT higher valuations than what it would have otherwise received for standalone Tech Mahindra, according to Business Line. However, chances are there that BT will choose to sell smaller chunks of its holding through open market transactions, even before the merger. Since Mahindra Satyam has revenues of around $1.2 billion and profitability of 12 percent as being widely reported, the merger with Tech Mahindra will directly add $150 million to Tech Mahindra's bottomline. Mahindra Satyam's restated accounts are made available on June 30. BT, which holds 31 percent in Tech Mahindra, could throw up an interesting challenge for the Mahindras who hold 44 percent in Tech Mahindra. The promoters have the right of first refusal as and when BT decides to offload its stake. At the current market price of Rs 708.20, BT's holding is valued at Rs 2,671 crore. At present, Tech Mahindra generates majority revenues from BT and enjoys committed business worth over $1 billion from the telecom behemoth. Though t he telecom operator talked with companies such as Kohlberg Kravis Roberts (KKR) and TCS for buying out its stake in Tech Mahindra two years ago, the plan was put on hold because of the adverse operating environment.