Sebi to change open offer rules; move to benefit Satyam suitors

Bhave said that the regulator felt that instead of providing a one-time exemption to Satyam it would be prudent to change the rules for such cases. “We must have a mechanism to deal with abnormal cases,” he said.

Satyam has seen a rapid decline in its share prices in the last two months starting with the announcement of an attempt to buy infrastructure companies promoted by Satyam chairman Ramalinga Raju’s kin and later compounded by his disclosure of a Rs 7,000-crore fraud in the company.

“There was a dire necessity to change the rules as under the present regulations — the 6-month-average-price rule — any company interested to make an open offer for Satyam shares would have to pay a price almost five times Monday’s closing price of Rs 57.60. This would be completely unviable for any prospective suitor considering the kind of liabilities sitting on Satyam’s books. There is a possibility that the regulator might approve two-weeks-average-price for Satyam’s open offer,” said a financial analyst in Mumbai.

Under the present takeover regulations,an investor who acquires 15 per cent of a company needs to make an open offer for another 20 per cent at a price which is not less than the average share price of the previous six months.

Who all are likely to bid for Satyam?

• Engineering firm Larsen & Toubro has built up a 12% stake in Satyam and is presently its biggest shareholder. It’s likely to increase the stake to 15 per cent in the next few days.

• Mahindra & Mahindra also said it would look at acquiring the IT company through its group company Tech Mahindra

• Spice group of BK Modi which is interested in taking over Satyam is ready to shell out Rs 2,000 cr

• Hinduja Global of the Hinduja group has also evinced interest in Satyam

• Essar is interested in Satyam’s BPO arm; iGate is keen on some parts of its businesses