SEBI may relax takeover pricing rules for L&T's acquisition of Satyam

02 February 2009

The Securities and Exchange Board of India (SEBI) is meeting tonight to take a decision on a plea by engineering and construction major Larsen and Toubro and the new board of Satyam Computer Services for relaxation in open offer rules for the takeover of scam-hit information technology major.

L&T, which is currently the largest shareholder of Satyam Computer, also seems to be the current favourite for acquiring the company and analysts expect the market regulator to relax takeover pricing rules for the fraud-hit company.

L&T is estimated to have acquired a 12 per cent stake in Satyam Computer Services for around Rs700 crore ($140 million) and the government-appointed board of Satyam is seeking a strategic investor for the firm.

L&T raised its stake to 12 per cent from 4 per cent when Satyam shares were under Rs40, gaining an average Rs80 a share.

Last week, buy-out firm Fidelity also raised its holding in Satyam computer to 6.8 per cent and since then Fidelity has increased its stake further.

State-run Life Insurance Corp, which is the largest shareholder in L&T with a 17.4 per cent stake at the end of 2008, also owns 4.3 per cent in Satyam.