04 December, 2020

Offer They Just Have To Refuse

L&T grabs at Mindtree, whose promoters try to dissuade shareholders; the top IT firm is now at a crucial juncture

Mindtree co-founders Subroto Bagchi, K. Natarajan and R. Ravanan
Photograph by IANS
Offer They Just Have To Refuse

Hostile takeovers always make news. In the high-profile Indian IT sector, it makes for a bodice-ripping plot. While takeovers have been attemp­ted in other sectors, this is the first instance of it in IT, that too for a prominent mid-tier company.

In the last fortnight, construction and engineering giant L&T’s attempt at a hos­t­ile takeover of the $846 million Mind­t­ree software has been in the news. Set up in 1999, Mindtree Limited has an emp­lo­yee strength of around 20,000 per­s­on­nel with revenue of Rs 84.6 crore (2017-18).

On March 26, L&T offered to buy about 31 per cent in Mindtree’s equity for Rs 5,030 crore at Rs 980 per share of Rs 10 face value. Before this, it signed an agreement to buy out the 20.3 per cent stake in Mindtree held by V.G. Siddhartha, of Coffee Day Trading and Coffee Day Ent­erprises, the company that owns Cafe Coffee Day. L&T will purchase this at Rs 980 per share, totalling Rs 3,269 crore. L&T has also placed an order for on-market purchase of up to 15 per cent...



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