Mindtree to be run independently for now, says L&T
1 min read . Updated: 19 Mar 2019, 01:28 PM IST- No plans to integrate Mindtree with L&T Infotech: L&T MD and CEO SN Subrahmanyan
- Larsen & Toubro will only provide board oversight
Mumbai: Engineering major Larsen & Toubro (L&T), which mounted a hostile takeover of software firm Mindtree with a ₹10,733-crore bid on Monday, ruled out merging it with its IT arm for the time being.
L&T on Monday announced a hostile takeover bid involving a three-pronged acquisition of Mindtree, wherein it will pay ₹980 a share for a 20.3% stake of V.G. Siddharth, buying 15% from the public and mounting an open offer at ₹980 a share later. Thus, it plans to acquire 67% for a consideration of ₹10,733 crore.
"We have not thought about integrating Mindtree with us (L&T Infotech). For the time being, it will be run as an independent entity," L&T managing director and chief executive S.N. Subrahmanyan said on Tuesday.
Describing the deal as a meeting of two like-minded people, Subrahmanyan said V.G. Siddharth, whose 20.3% stake the company bought out at ₹980 a share, had approached them three months back for buying him out.
"It was a meeting of minds between us and Siddharth," Subrahmanyan said, adding, the Cafe Coffee Day owner wanted to house his shareholding with a group where he saw the same governance values and ethics.
"The senior management at Mindtree are good friends with us and are people of repute and we see a lot of positivity in going ahead with the deal," he said.
He also reassured employees that L&T is a 80-year-old company with strong governance values.
"Mindtree will be run as an independent company, L&T will provide board oversight. We hope better sense and rationality will prevail," Subrahmanyan said.
L&T group chief financial officer R. Shanker Raman said there was a relative upside to Mindtree and that's what made them buy the company. Both companies (L&T Infotech and Mindtree) were $1 billion each and had enough opportunity to grow respectively, he added.
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