The board of India's Satyam Computer Services plans to announce the top bidder for a controlling stake in the company, which plunged into turmoil Jan. 7 when founder and chairman B. Ramalinga Raju confessed to a $1 billion fraud.
Larsen & Toubro, one of India's largest engineering conglomerates, and Tech Mahindra, a mid-sized telecommunications services firm, told the Associated Press Monday that they had submitted bids. Bids were due at 9am (0330 GMT).
Satyam board members and investment bankers from Avendus and Goldman Sachs plan to spend the day holed up in a room in Mumbai's elegant Taj President hotel, pouring over the offers and announce the highest bidder in the afternoon.
The winning bidder must be approved by the government.
Raju and eight others, including two auditors from Price Waterhouse, are facing charges of criminal conspiracy, cheating and forgery for allegedly stealing millions of dollars from the company.
Satyam, once India's fourth-largest outsourcing company, has been fighting for its survival since Raju's confession. The sale has taken on urgency amidst media reports that clients and staff have been leaving.
Speculation about leading bidders has focused on Larsen & Toubro and Tech Mahindra, as well as US private equity investor Wilbur Ross, and Nasdaq-listed Cognizant Technology Solutions Corp.
Larsen & Toubro has a software services and back office subsidiary called L&T Infotech whose clients include Chevron, Hitachi, Sanyo and Sunoco.
From Dec. 30 through the third week of January, Larsen & Toubro acquired a 12 percent stake in Satyam.
Ross and Cognizant could be reached for comment Monday morning.
Suitors have faced the difficult task of valuing Satyam before its scrambled books have been untangled. Satyam, which is listed on the New York Stock Exchange, also faces a spate of class action lawsuits in the United States.
Ratings agency Fitch was so concerned about these uncertainties that it withdrew its rating from Tech Mahindra, which is owned by India's Mahindra & Mahindra Ltd and British Telecommunications plc, after the company expressed interest in acquiring Satyam.
Bidders must have total net assets of at least $150 million and agree to a three year lock-in on their ownership stake.
The suitor bidder will buy a 31 percent stake in Satyam through a new share issue, then make an offer on the open market to buy an additional 20 percent.
If enough shares can't be acquired from the market, the bidder will be able to buy additional new shares to make up the shortfall.
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