Satyam Computer Services Ltd , the company snared in India's biggest corporate scandal, is set to announce a winning bidder for a controlling stake, and its shares jumped to a two-month high in anticipation on Monday.

The government-appointed board started a meeting at 9.00 a.m. (11:30 p.m. EDT) in Mumbai to receive bids and is expected to unveil the buyer for a 51 percent stake in the outsourcing company later in the day.

Indian engineering and construction firm Larsen & Toubro , which owns 12 percent stake in Satyam, has submitted a bid for the outsourcing firm, a company official who did not want to be identified told Reuters.

Separately, television channels reported mid-sized IT services firm Tech Mahindra and U.S.-based outsourcing firm Cognizant Technology Solutions had also submitted their bids for Satyam.

Ahead of the announcement of a new owner, shares in Satyam rose as much as 16 percent to 54.90 rupees, their highest since February 4 and valuing the firm at around $740 million, compared to about $7 billion last May.

For a graphic on Satyam's share price in recent months and major developments since the fraud was revealed, see:

http://graphics.thomsonreuters.com/apr09/IN_STYM0409.jpg

Shares in L&T, which is seen as a front-runner by many analysts as it is the largest shareholder in Satyam, were down nearly 4 percent at 796 rupees and Tech Mahindra was down 2.3 percent at 312.70 rupees in a slightly positive Mumbai market <.BSESN>.

Analysts have said Satyam looks attractive due to its long list of marquee clients and after the plunge in its market value caused by the $1 billion-plus fraud.

However, they are unsure how to value the company due to uncertainty about its accounts and legal liabilities arising from lawsuits filed in the United States by its shareholders.

SURVIVAL

Three months ago, Satyam's founder and chairman shocked investors by saying profits had been overstated for years, and put in doubt the survival of the company once ranked as India's fourth-largest software services exporter.

The government quickly stepped in and sacked the board to limit damage to India's once-shining IT services sector.

The winning bidder would buy a 31 percent stake in the company through a preferential allotment of new shares, and then make a public offer to buy 20 percent more, as required by Indian law.

If the investor did not have a 51 percent stake after the open offer, it has the option of increasing its stake through a further preferential allotment of shares, Satyam said last month.

In October, Satyam had said it had around 53,000 employees and more than 600 clients including General Electric , Cisco Systems and Qantas Airways .

It has not reported results since releasing July-September figures in October. Its accounts are in the process of being restated.

($1=49.9 rupees)

(Reporting by Janaki Krishnan, Prashant Mehra & Devidutta Tripathy; Writing by Anshuman Daga and Sumeet Chatterjee; Editing by John Mair)

Mahindra Satyam India