New Delhi: Larsen and Toubro Ltd gained control of 51.8% of shares in Mindtree Ltd on Wednesday, coming days after India’s largest engineering and construction company wrested control of the board of the Bengaluru-based information technology services (IT) company, and thereby successfully completing the first hostile takeover in the IT sector.
L&T first bought 20.32% stake in Mindtree held by Café Coffee Day (CCD) founder V.G. Siddhartha and two of his firms in March. Subsequently, over the next two months, the Mumbai-headquartered engineering firm bought 8.58% stake from other shareholders, bringing its total ownership to 28.90% before the company’s open offer started on 17 June. The open offer ends on 28 June.
Also read: L&T tightens its grip on Mindtree, buys out Nalanda Capital’s stake
Under the current open offer, in which shareholders can sell their shares to L&T for ?980 a share, 73.9% of public shareholders have sold their shares to L&T at ?980 a share. At 12:30 on Wednesday, 3,79,65,103 shares had been tendered, according to data provided by the National Stock Exchange.
Last week, Mindtree’s board agreed to three of L&T’s executives, including chief executive S.N. Subrahmanyan, chief financial officer R.S. Raman, and senior executive vice-president of L&T’s defence business Jayant Damodar Patil joining the board. Separately, Mindtree also agreed to L&T’s proposal to induct two independent directors, including former L&T executive Prasanna Rangacharya Mysore and former bureaucrat Deepa Gopalan Wadhwa.
The embattled founders of Mindtree together own 13.32% in the company. Additionally, S. Janakiraman is also a co-founder but his shares are not classified as part of the promoter shareholding. Janakiraman held 1.51% stake in the company until last week.
L&T has the option to buy another 15% shares as it plans to spend ?10,800 crore to own 66% in Mindtree, making it the first hostile acquisition for the Indian IT industry.