Satyam Seeks to Ease Pricing

MUMBAI -- India's capital markets regulator Monday said it has received a request from the board of Satyam Computer Services Ltd. to ease rules relating to open offer pricing. Such a change, if granted, could pave the way for a takeover of the software exporter.

C.B. Bhave, chairman of the Securities and Exchange Board of India, told reporters that SEBI recognizes that there is a need to amend pricing norms for open offers to suit all situations.

Potential buyers of Satyam have been deterred by India's current open offer pricing norms, which would set the price at the stock's six-month average -- making it around 270 rupees ($5.53) a share. In the wake of its accounting scandal, Satyam's shares are trading below 60 rupees apiece.

Mr. Bhave's comments came as the Hinduja Group added its name to a growing list of Satyam suitors. "There are several synergies between Satyam's business process outsourcing business and our information technology arm, and we are very interested in it," a Hinduja spokesman said.

"We have approached Goldman Sachs and expressed interest in buying Satyam Computer," Hinduja's spokesman said. "We have over $100 million in cash reserves, and...are willing to put in more money if required."

Among the other companies expressing interest in buying Satyam are Indian engineering and construction firm Larsen & Toubro Ltd., which holds a 12% stake in Satyam; U.S.-based iGate Corp., Indian software firm HCL Technologies Ltd. and B.K. Modi-led Spice Group.

Hyderabad-based Satyam was plunged into turmoil following revelations by founder B. Ramalinga Raju in early January that he had overstated profits over several years and created a fictitious cash balance of more than $1 billion.

Satyam's board is likely to meet Thursday to consider offers from potential buyers, among other issues. The board last week picked investment banks Goldman Sachs and Avendus to talk to potential buyers and evaluate proposals. The board had made it clear earlier that it is looking to sell the company in whole, and not in parts.

Satyam shares closed Monday up 6.6% at 57.60 rupees on the Bombay Stock Exchange. They are down 75% since Satyam's aborted efforts in December to acquire two infrastructure companies, Maytas Infra Ltd. and unlisted Maytas Properties Ltd., controlled by the Raju family.

Hinduja said the company is awaiting clarity on Satyam's valuation, which will be possible only after its accounts are restated and published.

Separately, Satyam said Monday it has signed 15 outsourcing contracts, including the renewal of existing pacts, in January.

Among the deals, the company has signed pacts with an insurance and a pharmaceutical company, and also renewed its contract with a U.S.-based technology firm, company spokeswoman Archana Muthappa said.