Larsen and Toubro is an engineering major which seeks to buy a controlling share in Mindtree Ltd. after it walked into an agreement with Coffee Day Enterprises founder VG Siddhartha acquire 20.3 percent shareholding in the mid-sized IT firm.
According to a company statement filed with stock exchanges, L&T will buy the 20.3 stakes in Mindtree from Siddhartha for Rs 980 per share, totaling Rs 3,269 crore, L&T also intends to purchase an additional stake of up to 15 percent from the open market, at up to Rs 980 per share. That could cost it up to Rs 2,434 crore.
L&T’s Chief Executive Officer and Managing Director SN Subrahmanyan said in the statement, “this acquisition is part of our strategy to deliver industry-leading IT services to our clients worldwide.”
He also added, “MindTree has a well-established management team which has earned the respect of the market in terms of its service offerings and business practices. This acquisition will allow L&T to further enhance shareholder value for both its own shareholders and Mindtree shareholders in the medium to long term.”
Mindtree promoters, N Krishnakumar, Subroto Bagchi, NS Parthasarathy, Rostow Ravanan, own close to 13 percent of the company, they also made a statement saying, “a hostile takeover by Larsen & Toubro, unprecedented in our industry, could undo all of the progress we’ve made and immensely set our organization back.”
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