At its meeting on Tuesday, Mindtree Board decided not to go ahead with its own plan to come out a buyback offer.
Bengaluru-based Mindtree, which has been vociferously opposing Larsen & Toubro's bid to buy majority stake in the company, has formed an independent committee to look into infrastructure giant open offer to buy 5.13 crore shares, or 31% stake, of the information technology firm.
At its meeting on Tuesday, Mindtree Board decided not to go ahead with its own plan to come out a buyback offer.
Instead, "the Committee of Independent Directors in the interest of all stakeholders" will provide reasoned recommendation in respect of the "unsolicited offer by L&T", said a regulatory filing by Mindtree after the meeting.
Apurva Purohit, president, Jagran Prakashan and former chief executive officer of Radio City and lead independent director of Mindtree, will head the newly formed panel. This independent committee "will consider and evaluate all aspects of the unsolicited offer…"
On Tuesday, engineering conglomerate L&T in an attempt to take majority control of Mindtree came out with an open offer. The company is offering Rs 980 per Mindtree, aggregating to Rs 5,030 crore. The offer is open on May 14-27, 2019, according to a detailed announcement.
Earlier this month, L&T was approached by Cafe Coffee Day owner and one of the Mindtree promoters V G Siddhartha, who wanted to offload his 20.32% stake in the Bengaluru firm. The acquisition of his stake for Rs 3,269 crore triggered the open offer by L&T. Secondly, the engineering company has also picked up 15% of Mindtree's shareholding from the open market through brokers.
As per estimates, the purchase of 66% stake in Mindtree will cost L&T around Rs 10,800 crore.
Mindtree co-founders have been opposing this "hostile" bid by L&T to acquire the firm.
Last week, L&T in a public statement had mentioned that post-acquisition, Mindtree will continue to be run as an independent company.
As per a report, Mindtree's executive chairman has been offered to continue in the same position to steer the IT firm.
Coming around
- Rs 980 per share – L&T is offering for Mindtree shares under open offer
- Rs 10,800 crore-- Co will have to shell out for buying 66% of Mindtree stake
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