L&T needs to first own 26 percent stake to make an open offer for Mindtree equity share and get a place on the board. This will give L&T the ability to block special resolutions. The company intends to do this through open market purchases.
The Mindtree board will meet on March 26 to discuss a proposed buyback of equity shares, even as Larsen & Toubro (L&T) plans to make a detailed public statement on an open offer for Mindtree shares on the same day.
Reports suggest independent directors of Mindtree will also constitute a committee to advise shareholders on whether to participate in the open offer.
Mindtree has four independent directors – Akshaya Bhargava, Bijou Kurien, Milind Sarwate and Apurva Purohit. The committee, a CNBC-TV18 report said, is likely to be headed by Purohit and ensure there is no disruption in operations.
The founders of Mindtree are doing everything possible to thwart the hostile takeover bid by L&T and are even likely to set up a meeting with L&T.
L&T needs a 26 percent stake to make an open offer for Mindtree and a place on the board. This will give the engineering behemoth the ability to block special resolutions and trigger a mandatory open offer.
On March 18, L&T acquired a 20.32 percent stake in Mindtree for Rs 980 per share from one of its largest shareholder and Founder of Coffee Day Enterprises VG Siddhartha.
Although, as per law, L&T needs only an additional 5-6 percent stake to be eligible to make an open offer, it plans to make open market purchase of up to 15 percent. Analysts say this could to better their chances of reaching the required limit to trigger the open offer.
Once it reaches the 26 percent threshold, L&T can trigger an open offer for 31 percent Mindtree shares. If all goes as planned, L&T will own a nearly 66.32 percent stake in the IT services firm. This would put the total takeover cost at Rs 10,733 crore, assuming that L&T gets each share at Rs 980.
According to a Mint report, Mindtree said 39 percent of its existing shareholders had rebuffed the current offer of Rs 980 a share. These include Akash Prakash-led Amansa Holdings and UTI Mutual Fund, which owns 2.77 percent and 2.9 percent stake, respectively.
