MUMBAI (Reuters) - India's market regulator will consider relaxing takeover rules for an open offer in Satyam Computer Services to help the fraud-scarred outsourcer attract suitors, two newspapers said on Monday, without naming any sources.

The race to acquire Satyam, the company snared in India's biggest corporate scandal, heated up last week as diversified Spice Group offered to buy a 51 percent stake, joining other potential bidders.

The Economic Times said the Securities and Exchange Board of India (SEBI) will consider a proposal from Satyam's government-appointed board to set the open offer price over a shorter period, probably two weeks, instead of the usual six-month average.

Under India's takeover code, any investor who acquires 15 percent of a company needs to make an open offer for another 20 percent at a minimum of the past six weeks average share price.

A SEBI spokesman told Reuters its board is due to meet on Monday, but declined to comment on the report or give details.

The Business Standard newspaper said the board would consider waiving the open offer pricing rule for potential buyers.

Shares in Satyam, whose market value has plunged to about $750 million from $7 billion in May 2008, ended 8.4 percent higher at 54 rupees on Friday. The company counts General Electric and Nestle among its clients.

The government-appointed board has named bankers to identify strategic investors for Satyam.

Larsen & Toubro, India's top engineering and construction, last month trebled its stake in Satyam to 12 percent. U.S.-based outsourcer iGate has said it would keen to buy Satyam with help from private equity funds.

The Economic Times said on Monday Indian utility vehicle and tractor maker Mahindra & Mahindra group, which also controls software services firm Tech Mahindra Ltd, is is also looking at Satyam.

A Mahindra & Mahindra spokeswoman declined comment on the report.

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