Engineering and construction major Larsen and Toubro (L&T) has officially acquired a 20 per cent stake in Mindtree from Cafe Coffee Day founder VG Siddhartha, taking a leap towards acquiring a majority stake in Bengaluru-based IT services firm.
On Tuesday, L&T acquired around 3.27 crore Mindtree shares, or almost 20 per cent of the stake, at Rs 980 per share (for a total of Rs 3,211 crore) from Siddhartha and Coffee Day Enterprises through block deals, according to data on the Bombay Stock Exchange.
Media reports suggest that L&T may call for a Mindtree shareholders' meeting. Earlier in March, L&T had said that it would make an open offer to acquire a 31 per cent stake in Mindtree for Rs 5,030 crore ($730.20 million) after signing a pact with Siddhartha to buy his 20.32 per cent stake in the company for about Rs 3,300 crore. The company plans to raise its stake in Mindtree to 66.32 per cent by spending as much as Rs 10,800 crore through a combination of open offer and stock market purchase.
Now L&T needs to buy nearly 5 per cent stake in Mindtree to touch the 25 per cent threshold that will prompt an open offer. In addition, L&T has placed an order with brokers to pick up another 15 per cent of the Mindtree shares from the open market. All the three acquisitions - adding up to a 66.32 per cent stake - are being done at Rs 980 per share. The stock is currently priced at Rs 981.30 apiece on the BSE.
Last month, Mindtree had set up a committee of independent directors to evaluate L&T's open offer. The committee, headed by the lead independent director Apurva Purohit, would take in consideration all aspects of the 'unsolicited offer', by looking into all the relevant facts, circumstances, data related and provide an informed view, keeping in mind the interest of all stakeholders in the company.
In the March quarter earnings report, Mindtree's board had proposed to pay a special dividend of Rs 20 per share to its shareholders, including promoters, which along with regular dividend of Rs 4 and tax components would strip the mid-sized IT firm of about Rs 530 crore. The decision to pay the highest ever dividend by the company is being seen as a tactic to avert the looming hostile takeover bid by L&T.
As per the latest shareholding pattern of Mindtree, promoters--including Chairman Krishnakumar Natarajan, Subroto Bagchi, Managing Director Rostow Ravanan and Chief Operating Officer NS Parthasarathy--are holding an aggregate 13.32 per cent stake in the company.
Edited by Chitranjan Kumar