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Sun 1 Feb 2009 12:00 AM

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Spice Group makes $408m bid for Satyam

Spice Group joins growing list of suitors for Satyam with majority stake offer to board

Indian conglomerate Spice Corp has made a $408 million bid for services company Satyam.

The group, which has interests in mobile software and handsets, IT services and entertainment, has approached the board of Satyam, with a view to taking a 51% stake in the company.

Dr B K Modi, chairman of the group, said that the direct offer was intended to inject much needed cash into Satyam, rather than have Spice Group buy the shares on the open market.

“We want the money to go inside the company. For that they will have to make a preferential issue. If I buy shares from the market, the money will not go into the company,” Modi said.

Modi also stressed that Spice has the $400 million funds, thought to be equal to the amount needed for a bail-out, in available cash.

Spice Corp joins engineering company Larsen & Toubro, which has a 12.2% stake in Satyam, Hinduja Group and Fidelity fund managers as possible buyers of Satyam.

Fidelity has increased its stake in Satyam to 7.66%, from 3.17%, after making several stock purchases over the past week.

The Hinduja Group, has made a formal approach to the board, although the group would need to find additional funding to make a viable offer for Satyam.

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