L&T buys 13,440 more shares of Mindtree from open market
MUMBAI: Larsen and Toubro Ltd (L&T) on Friday purchased 13,440 shares of IT services firm Mindtree Ltd. at ₹979.98 apiece in its run-up to the proposed takeover of the latter. With Friday’s purchase L&T holds 43.49 million shares or a 26.48% stake in Mindtree, according to an exchange filing.
Mindtree’s stock closed up 0.16% at ₹981.80 on BSE.
After crossing the 26%, L&T is in a position to demand a board representation in Mindtree.
The engineering behemoth L&T is in the process of taking over Mindtree, with a plan to buy up to 66.32% in the company for a total of up to ₹10,700 crore. The deal, once consummated, will mark the country’s first hostile takeover in the IT industry.
According to the plan submitted in a draft letter of offer to the Securities and Exchange Board of India or Sebi and exchanges on 2 April, L&T, after buying 20.32% stake jointly held by Café Coffee Day (CCD) founder V.G. Siddhartha and two of CCD’s associate firms, intended to buy an additional 15% from the open market and 31% more through an open offer at a price of₹980 per share.
The open offer was originally proposed to be launched on 14 May and closed on 27 May.
However, L&T was compelled to postpone its open offer by at least a fortnight as the markets regulator has not approved L&T draft letter of offer and sent a set of queries to the engineering behemoth on the proposed takeover, which was answered by L&T on 10 May.
If Sebi does not raise further queries and approves the draft letter of offer by 17 May, L&T will initiate the open offer process and file its final letter of offer. Once the draft letter of offer is approved, Mindtree’s independent directors have to be given at least two working days to provide recommendation to the shareholders. At least two days after that, the open offer can be launched. The entire process will take at least two weeks. Therefore, the open offer may actually be launched either at the end of this month or early June.
However, irrespective of the open offer L&T will continue to purchase Mindtree shares from the public during trading hours until it finishes buying the planned 15% from the open market.