Shares of Mindtree surged as much as 2.38 per cent to Rs 968.55 in the early trade on Monday after the company announced it will consider share buyback plan on March 20 to fend off attempts by engineering major Larsen & Toubro (L&T) from making a hostile takeover bid.
The announcement of a possible share repurchase has come amid reports of L&T’s board giving the green signal to buy Café Coffee Day founder VG Siddhartha’s 20.41 per cent stake in Mindtree.
As corporate action like a buyback usually pushes up the share price, many analysts had seen it as an attempt by the management to make it costlier for any acquirer to take control of the company, apart from rewarding existing shareholders. READ FULL REPORT
In a fresh developemnt, Subroto Bagchi — one of the co-founders of Mindtree — resigned on Sunday as the head of Odisha Skill Development Authority and will return to Bengaluru.
He said on his Twitter handle. “An imminent threat of hostile takeover of Mindtree has made me resign from the (Odisha) government, (so that I will be) able to go, (and) save the company,” he said. “I must protect the tree from people who have arrived with bulldozers and chainsaws, so that in its place, they can build a shopping mall.” READ FULL REPORT
Mindree faces the risk of management change as its largest shareholder (VG Siddhartha) is reportedly in talks with a rival technology firm (L&T) to offload his stake.
Meanwhile, the stock of L&T was trading nearly a per cent higher in the early trade. In comparison, the benchmark S&P BSE Sensex was trading over 300 points or 0.80 per cent higher at 38,344.25 levels.