The Securities & Exchange Board of India threw a spanner in the works of an imminent takeover of Mindtree by Larsen & Toubro by raising queries on the intended deal which led to L&T not carrying out an open offer on the original date - May 14. Meanwhile, L&T has been able to mop up shares from the market, becoming the single largest shareholder in the company with over 26.5 per cent stake in Mindtree.
This move gains significance as it provides L&T enough ammunition to seek a board seat and block any resolution that Mindtree could move to change the capital structure or allocation of funds. While the fresh date for the open offer is yet to be announced, the earlier announcement of a 200 per cent dividend by Mindtree, which could have significantly eroded the cash on books, will in all likelihood be countered by L&T to protect its interests.
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