Given that the Securities and Exchanges Board of India (SEBI) is yet to give its nod to L&T’s open offer, some reports state that IDC might wait till SEBI gives its nod.
Mindtree’s Independent Director Committee (IDC) is not likely to give its recommendations to shareholders regarding the open offer by L&T that commences on May 14.
The deadline for the recommendations was May 10 as per the detailed public announcement by L&T in March. The open offer ends on May 27.
In an email statement to Moneycontrol, Apurva Purohit, chairperson, IDC, said that the committee will follow the due process and there is no fixed date for giving recommendations as it is linked to the time when letter of offer is issued and the commencement of the open offer.
Purohit, said in the statement, “The IDC will be following the required process as per law, and the recommendations will be given within the timelines prescribed under the takeover regulations.”
“The recommendation date is linked to when the Letter of Offer is issued (and when tendering process starts) and is not a fixed date, and thus the recommendation will be given at that stage,” Purohit added. An email requesting further clarification went unanswered.
Given that the Securities and Exchanges Board of India (SEBI) is yet to give its nod to L&T’s open offer, some reports state that IDC might wait till SEBI gives its nod.
SEBI is also looking at Mindtree's total dividend of Rs 27 per share, which was announced by the company to mark its 20th anniversary and for crossing $1 billion in revenue, said reports.
This is the highest dividend in the history of Mindtree, and some had raised questions regarding such a high divdend at a time when it is the target of a hostile takeover bid. However Rostow Ravanan, CEO, Mindtree, had said that there was no motive for the dividend aside from marking the key milestones.
L&T on May 9 upped its stake to 25.93 percent in Mindtree. A stake of over 25 percent stake in Mindtree means that L&T can call for board meetings and seek a seat on the Mindtree board. Recently, few sources said L&T had raised concerns about Mindtree’s governance and board practices and these matters would be the focus for L&T management.
In India’s first-ever hostile takeover bid, L&T signed a definitive agreement to buy 20.32 percent from VG Siddhartha and his coffee enterprise for over Rs 3,000 crore on March 18, 2019. The deal was formalised last month.
The company said it will buy an additional 46 percent through the open market purchase of 15 percent shares and 31 percent through an open offer. This puts the total value of the acquisition at Rs 10,700 crore.
On May 6, L&T bought shares worth about Rs 113 crore of Mindtree through open market transactions. The infrastructure major acquired 37,58,776 shares through open market on May 8 at Rs 979.96 per piece. Meanwhile in a separate transaction, Rekha N Shah sold 26.84 lakh shares of Mindtree for Rs 263 crore, according to reports.
