With L&T moving to acquire stake of Café Coffee Day owner V. G. Siddhartha바카라s stake in Mindtree and coming closer to acquisition of one of India바카라s leading mid-tier IT companies, the stage is set for probably the first hostile takeover of a company in India바카라s vibrant IT sector.
L&T late on Monday moved to acquire 20.32 per cent stake in Mindtree by acquiring the stake of Siddhartha. L&T purchased the stake at Rs 980 per share, spending about Rs 3,269 crore.
To seal the company바카라s fate, L&T also placed an order for a purchase of about 15 per cent of Mindtree바카라s share capital from the market at the same price. As per SEBI바카라s takeover laws, the company has also announced an open offer to public shareholders of Mindtree to pick up another 31 per cent of the IT company바카라s shares, again at the same price per share.
While this acquisition will enhance L&T바카라s technology and IT services and give it an edge in digital and cloud solutions, through Mindtree it will get an established team and IT services portfolio which has a reputation and great track record.
Obviously, this design was not part of Mindtree바카라s scheme, and the promoters are trying their best to huddle and find a way out of this emergency situation.
Erstwhile CEO and one of the pillars of Mindtree, Subroto Bagchi has resigned from his position as head of Odisha Skill Development Authority to 바카라save바카라 Mindtree. His return to the company would of course strengthen the management바카라s hand in stalling the hostile takeover in case they are able to muster enough strength to face the onslaught.
For promoters of Mindtree, including Bagchi, Mindtree was a family garden where IT was nurtured as an art. Even the designations of top executives were tuned to gardening even though the company did top class IT services work for its clients. Soon after news of the hostile takeover gathered steam, Bagchi had tweeted, 바카라Mindtree has not been designed as an 바카라asset바카라 to be bought and sold. It is a natural resource. It has a unique culture that humanizes the idea of business. It sets the standards of corporate governance바카라바카라
He made it clear that he 바카라must protect the Tree from people who have arrived with bulldozers and saw chains to cut it down so that in its place they can build a shopping mall.바카라
Later, on Monday, Mindtree바카라s promoters, including executive chairman Krishnakumar Natarajan, co-founder Bagchi, CEO Rostow Ravanan and executive vice chairman and COO Parthasarathy N.S. issued a statement in this regard.
They said, 바카라the attempted hostile takeover bid of Mindtree by Larsen & Toubro is a grave threat to the unique organization we have collectively built over 20 years. Since we started the company in 1999, we have built a rock-solid organization that outperforms its peers in IT services, differentiates and innovates through digital, and consistently delivers strong financial results and favorable returns to our shareholders. We바카라ve also carefully created a differentiated corporate culture made up of our amazing 바카라Mindtree Minds,바카라 which reached the 20,000 milestone this year.바카라
The promoters were of the opinion that a hostile takeover by L&T, unprecedented in the IT industry, could undo all of the progress the company has made and immensely set the organization back. 바카라We don바카라t see any strategic advantage in the transaction and strongly believe that it will be value destructive for all shareholders. Our collective success depends on building and nurturing relationships with our clients and partners. This unexplainable transaction will bring disruption to those relationships and impair Mindtree바카라s ability to differentiate itself in the market and continue to deliver client value and great shareholder return. We believe that culture needs to be carefully created and nurtured over time, and can바카라t be bought and sold like any asset.바카라
바카라We remain 100 percent committed to our long-term vision of building an independent company. We believe it바카라s in the best interests of our shareholders, Mindtree Minds, and our organization overall to continue opposing this takeover attempt. In addition, there has been a large outpouring of sentiment from Mindtree Minds online at #MindtreeMatters expressing their strong desire to retain our culture and our independence. In the meantime, while this situation unfolds, Mindtree will continue to be laser focused on continuing the stellar work for our clients and delivering great value to them.바카라
If the present promoters are able to hold back the takeover attempt, it will save a well nurtured and disciplined company and carry on with the good work they have been doing and maintain the momentum in the growing Indian IT industry. If however, L&T succeeds in the hostile takeover, and all the signs point towards that at the moment, it will set a precedent in the Indian IT sector that may not go down well with the rest of the industry.
