Mindtree Opposes Takeover Bid, L&T Rules Out Merger With IT Arm

L&T made an offer on Monday, to buy up to 66 percent stake in Mindtree for Rs 10,733 crore.

L&T made an offer on Monday to buy up to 66 per cent stake in Mindtree

(Photo Courtesy: PTI)

Strongly opposing Larsen and Toubro’s (L&T) hostile bid, Mindtree promoters on Tuesday, 19 March, asked why the infrastructure giant could not build a great technology business on its own and wondered what kind of a message is being sent to start-ups and credible entrepreneurs with the takeover attempt.

Posing five questions to diversified L&T, which already has two separate IT firms, the promoters also wanted to know what would happen if Mindtree employees choose to leave after the takeover.

"You are a company with a turnover of Rs 1,20,000 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 promoter and Executive Chairman Krishnakumar Natarajan said in a press conference.

In the country’s first hostile takeover bid in the IT sector, L&T made an offer on Monday, 18 March, to buy up to 66 per cent stake in Mindtree for Rs 10,733 crore. In a three-pronged acquisition of Mindtree, it will pay Rs 980 a share to buy Cafe Coffee Day owner V G Siddhartha’s 20.32 per cent stake in Mindtree, buy 15 per cent from the public and mount an open offer at Rs 980 a share later.

On Tuesday, the engineering major also ruled out merging Mindtree with its IT arm for the time being. “We have not thought about integrating Mindtree with us (L&T Infotech). For the time being, it will be run as an independent entity,” L&T Managing Director and chief executive S N Subramanyan told reporters here on Tuesday.