The Securities and Exchange Board of India will change its rules on mandatory open offers to buy shares in firms after an approach from Satyam Computer Services' new board, but gave no timeframe on Monday for the changes.

The revision could help the fraud-hit outsourcer attract suitors, who are currently deterred by a requirement that a stake of 15 percent triggers an automatic offer for another 20 percent at a price not less than the average of the previous six months.

The race to acquire Satyam has heated up with bidders ranging from engineering and construction firm Larsen & Toubro to diversified Spice Group looking to tap into the vast client base of the company snared in India's biggest corporate scandal.

"We will amend our regulations through guidelines to enable a transparent process for arriving at a price in case of such acquisitions," C.B. Bhave, chairman of Securities and Exchange Board of India (SEBI), told reporters after a board meeting.

Bhave said rather than create a one-off exemption for Satyam, the regulator would amend its regulations covering open offers.

"We have come across an abnormal situation. So, we need to find a mechanism to deal with it," he said. "It is our concern that it should be arrived at in a transparent manner."

At the end of last week, the 26-week average price was about 255 rupees, Thomson Reuters data showed.

Shares in Satyam rose 6.6 percent on Monday to 57.60 rupees, supported by bidding speculation, in a Mumbai market that fell 3.8 percent.

"We are aware of the urgency of the matter. As soon as we finalise this, we will be informing you," Bhave said.

Ahead of Monday's meeting, Indian media had reported that SEBI might relax the open offer rules for Satyam, perhaps basing the offer price on a shorter period.

Satyam's shares have fallen sharply since mid-December, first on a planned deal to buy related companies and then after founder Ramalinga Raju quit on Jan. 7, disclosing profits had been overstated for years.

Satyam has been struggling to survive since. Its market value has plunged to about $800 million from $7 billion in May 2008.


Analysts say L&T, which also runs a smaller unlisted software firm, looks best placed to pounce on the New York-listed outsourcer if the rules on takeover pricing are relaxed.

After spending around 7 billion rupees ($140 million) on trebling its stake in Satyam to 12 percent, L&T has become its biggest shareholder as the government-appointed Satyam board is seeking a strategic investor for the firm.

Last week, Spice Group offered to buy a 51 percent stake in Satyam, joining other potential bidders such as U.S.-based outsourcer iGate Corp. Satyam counts General Electric and Nestle among its more than 600 clients.

"Whoever is going to bid for Satyam will do so only on terms that are favourable to them, whether it is the open offer price or the provision to distance themselves from liabilities that may arise," said Tejas Doshi, head of research at Sushil Finance.

"Buyers are interested in taking the cream of Satyam business and it is very clear that they are attracted by its marquee clients."

Raju, his brother and former managing director Rama Raju, and former CFO Vadlamani Srinivas are currently being held in a jail in the southern city of Hyderabad, where Satyam was founded more than two decades ago.

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