A file photo of Mindtree co-founder Subroto Bagchi (left) unveiling the company's new logo, in Bangalore in 2012. Photo: The Times of India/ N Narasimha Murthy.

The founders of Bangalore-based IT services firm Mindtree Ltd are scrambling to foil a hostile takeover attempt from engineering giant Larsen & Toubro Ltd (L&T).

Founders Krishnakumar Natarajan, Subroto Bagchi, N.S. Parthasarathy and Rostow Ravanan together hold a 13.32% stake in the company, while coffee baron and Cafe Coffee Day (CCD) founder V.G. Siddhartha and two of his companies, Coffee Day Enterprises and Coffee Day Trading, hold 20.4%.

L&T has offered to pay 981 rupees per share to buy the entire stake held by Siddhartha and his two companies and later make an open offer to buy 51% of Mindtree, Live Mint reports.

It reportedly plans to spend US$ 1 billion, including an open offer to minority investors, to gain a controlling stake in the company and comply with Indian takeover laws.

Mindtree, meanwhile, has told stock exchanges that it will consider a share buyback plan during its next board meeting on March 20 to prevent L&T’s hostile takeover bid, which has boosted Mindtree’s share price. A buyback move could increase the acquisition cost for L&T and reduce the number of shares available for purchase.

Its founding promoters are also holding talks with Baring PE Asia, Chrys Capital and KKR to persuade them to buy Siddhartha’s shares so that they continue to hold the reins, Economic Times reports. They fear that L&T’s acquisition would pave way for the merger of Mindtree with L&T Infotech.

One of the founders, Subroto Bagchi, has reportedly resigned his government job as chairman of the Odisha Skill Development Agency in order to help thwart the takeover. A successful L&T bid would mark the first hostile takeover in the Indian technology industry.

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