Mindtree promoters have staunchly opposed L&T’s bid to acquire the company, describing it a grave threat and value destructive to shareholders,
Mindtree employees will quit if engineering giant L&T’s hostile takeover bid hurts their “sense of mission,” the IT company’s promoters said on Tuesday.
“You are a company with a turnover of Rs 120,000 crore, 18 times the size of Mindtree.
Why can’t you build a great technology business with your resources and capability without disseminating another organization?” Mindtree co-founder Krishnakumar Natarajan asked.
Mindtree promoters have staunchly opposed L&T’s bid to acquire the company, describing it as a grave threat and value destructive to shareholders.
“‘Mindtree Minds’ have signed up for a mission, not just a salary. If one percent takes their mission away, and they will go…what will you be left with?’ Natarajan said.
In the country’s first hostile takeover bid in the IT sector, infrastructure giant Larsen & Toubro on Monday offered to buy a percent stake in Mindtree for around Rs 10,800 crore.
L&T has entered into a deal to buy Cafe Coffee Day owner V G Siddhartha’s 20.32 percent stake in Mindtree and has also placed an order with brokers to buy another 15 of the company shares from the open market.
After these deals, L&T would make an open offer to buy an additional 31 percent stake through an open offer, it said in a late evening statement.
All three acquisitions are being made at Rs 980 per share, a premium percent over Mindtree’s closing price on Monday on the BSE.
Mindtree closed on the BSE at Rs 962.50a piece.
According to filings by L&T and Mindtree, L&T would pay Siddhartha Rs 3,269 crore and Rs 5,030 crore for the open offer.
According to a rough calculation, the company would spend around Rs 2,500 crore to acquire the additional 15 percent stake. Together, the outgo would be around Rs 10,800 crore.
Company CEO RostowRavanan said the company board will deliberate on the buyback tomorrow within the framework of the existing laws.
“As far as buyback is concerned, the board will deliberate on the buyback or the open offer tomorrow within the framework of the laws.
Obviously, first and foremost, there are laws—what the board can do and cannot do under the circumstances,” he said.
Asked to comment on L&T Group Executive Chairman A M Naik that some When asked promoters want to exit, Ravanan said, “It isNaik’s completely false.
All the management team supports the company.” Natarajan said L&T has decided to be the first hostile company in the 50-year-old, unblemished Indian IT industry.
“If you persist in your actions, you will be forever remembered for this. Is this how you want to set an example?” he asked.
He said Mindtree customers had selected it for its unique culture and warned that clients would “stall all future business and even take their business elsewhere”.
“In the process percent, you would have demolished shareholders’ value for both the companies. Is this the right thing to do?” Natarajan said.
Asked about the company’s options to fend off an L&T takeover, Natarajan said there are various options, and the company remains committed to its long-term vision of building an independent company.
Responding to a query, he said the independent directors will set up a committee to evaluate L&T’s open offer.
“Nevertheless, I would like to state that our 52-week high was Rs 1,183, and the deal was done at Rs 980. That only reflects the value of the transaction,” he said.
L&T earlier in the day, L&T had said in a statement that it would make an open offer to buy an additional 31 stakes through an open offer.
Replying to a query, Natarajan said Mindtrees’ stand is the same as it was there for years earlier.
Asked if Siddharth’s disclosure on pledging his shares in 2018 complied with SEBI rules, Ravanan said there were some irregularities in Siddharth’s disclosure at that point, which the company’s board and audit committee dealt with as per the rules prevailing then.
“If additional information becomes available to the company whether any of the disclosures were incorrect or anything needs to be done, the company would decide accordingly,” he added.
Mindtree promoters question L&T.
Why can’t you build a great technology business with your resources and capability without disseminating another organization?” says Mindtree co-founder Krishnakumar Natarajan
‘Mindtree Minds’ have signed up for a mission, not just a salary. Take their mission away, and they will go…what will you be left with,” If you persist in whatever you are doing, you will be forever remembered for this. Is this how you want to set an example?”In the pro, cess you would have demolished shareholders’ value for both companies. Is this the right thing to do?”
