L&T talks ‘dil & pyaar’, but Mindtree asks it to back off

BENGALURU/MUMBAI: L&T chief executive and MD S N Subrahmanyan invoked 'dil and pyaar' (heart and love) on Tuesday in an effort to calm the fears of Mindtree’s founders. But the latter would have none of it.

For the first time since news emerged about L&T’s unsolicited acquisition of the $900-million Bengaluru-based IT services company, Mindtree’s founders came together before the media to describe the move as a grave threat to a “unique” organisation and value-destructive for all shareholders. They said customers and employees choose Mindtree not for its buildings, but for its culture, and a takeover by L&T could persuade many to move elsewhere.

They even said it could grievously hurt the IT industry and the startup ecosystem. “If companies like you behave with extreme hostility to first-generation entrepreneurs, what message are you giving to all startups in the country?” asked Mindtree’s co-founder & executive chairman Krishnakumar Natarajan.

To repeated queries on whether they had any options before them to stall L&T, the founders appeared to suggest that the only option for now is to persuade government, industry well-wishers and L&T itself about the logic of their arguments, and hope that L&T would back off.

But if the founders sensed hostility in L&T, the latter, at a press conference in Mumbai a little before the Bengaluru event, presented a very different face. S N Subrahmanyan, said it was unfair to describe the $18-billion conglomerate as a corporate raider. He said it was a professionally run, entrepreneurial company seeking to work with another like-minded entity to realise bigger aspirations in technology services.

He noted that it wasn’t L&T that went looking for Mindtree, but the latter’s largest shareholder, VG Siddhartha, who had approached L&T for a deal, after finding that it had “values similar to Mindtree.” Cafe Coffee Day owner Siddhartha, who owns a 20% stake in Mindtree, needed urgently to sell the stake to clear some of his debts.

Subrahmanyan also said there were no plans to disturb Mindtree’s current management and the promoters could continue with the company.

That’s the one tiny door to rapprochement that may still be open. When Mindtree’s founders were asked what their response would be if L&T chairman A M Naik offered to give the current management total independence to operate, Natarajan said: “Let Mr A M Naik come and meet us. Depends on what kind of commitment he makes.”