Mindtree promoters hit back at L&T

Bengaluru: A day after L&T mounted an unprecedented hostile takeover bid on the IT firm, Mindtree promoters posed five questions to the infrastructure giant, asking why it could not build an independent tech business on its own and what would it do if employees chose to leave.

"You are a company with turnover of Rs 120,000 crore, you are 18 times the size of Mindtree. Why can't you build a great technology business with your resources and capability without disseminating another organisation?" Mindtree co-founder Krishnakumar Natarajan asked. Mindtree promoters have staunchly opposed L&T's bid to acquire the company, describing it a grave threat and value destructive to shareholders.

"This is a people business. `Mindtree Minds' have signed up for a mission not just a salary. Take their mission away and they will go. What will you be left with," Natarajan said. In the country's first hostile takeover bid in the IT sector, infrastructure giant Larsen & Toubro Monday made an offer to buy up to 66 per cent stake in Mindtree for around Rs 10,800 crore.

L&T has entered into a deal to buy Cafe Coffee Day owner V G Siddhartha's 20.32 per cent stake in Mindtree and has also placed an order with brokers to pick up another 15 per cent of the company shares from the open market.

Subsequent to these deals, L&T would make an open offer to buy additional 31 per cent stake through an open offer, it said in a late evening statement. All three acquisitions are being done at Rs 980 per share, a premium of 1.8 per cent over Monday's closing price of Mindtree on the BSE. Mindtree closed on the BSE at Rs 962.50 apiece.

L&T would pay Siddhartha Rs 3,269 crore and Rs 5,030 crore for the open offer, as per filings made by L&T and Mindtree. The company would shell out around Rs 2,500 crore for acquiring the additional 15 per cent stake. Together, the outgo would be around Rs 10,800 crore, according to a rough calculation.

As far as buyback is concerned, the company board would deliberate on it tomorrow within the framework of the existing laws, Company CEO Rostow Ravanan said.