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Mindtree board to meet today to discuss share buyback; L&T wants IT firm chairman Krishnakumar Natarajan to continue

Co-founders of Mindtree—Krishnakumar Natarajan, Subroto Bagchi, Parthasarathy NS, and CEO Rostow Ravanan, have reportedly approached Infosys chairman Nandan Nilekani and former CFO Mohandas Pai to seek advice on the next course of action they should take as the IT firm faces an Rs 10,800-crore hostile takeover bid from L&T, a media report said.

According to The Hindu Business Line, the co-founders also might seek their help in identifying investors who could act as a white knight to thwart L&T’s takeover bid.

Last week, diversified L&T made an offer to buy up to 66 percent stake in Mindtree for around Rs 10,800 crore - a move that Mindtree promoters have vowed to oppose.

Chairman of Mindtree Krishnakumar Natarajan has said that the promoters of the firm would like to know the "contours of the independence" being offered by L&T. "I don't know what the contours of the independence are. It is difficult to make a (judgement) based on a press statement," Natarajan was quoted as saying by The Economic Times.

L&T Chairman AM Naik told the newspaper that the engineering conglomerate would like Natarajan to continue in his current role which is an executive position.

 Mindtree board to meet today to discuss share buyback; L&T wants IT firm chairman Krishnakumar Natarajan to continue

Representational image. Photo courtesy: company website

Last week, L&T entered into a definitive share purchase agreement with coffee baron VG Siddhartha and his related entities to acquire 20.32 percent stake in Mindtree. The entities include Coffee Day Trading and Coffee Day Enterprises. L&T will purchase this stake at a price of Rs 980 per share aggregating to about Rs 3,269 crore.

Siddhartha was a director of Mindtree since 1999 and resigned in March 2018. He and Cafe Coffee Day group firms have 20.32 per cent stake in Mindtree and that shareholding is to be acquired by L&T.

On Tuesday, Mindtree CEO and promoter Rostow Ravanan said the company's board would deliberate on the buyback or the open offer within the framework of the laws. "Obviously there are laws—what the board can do and cannot do under the circumstances," he had said.

Strongly opposing L&T's hostile bid, Mindtree promoters had asked why the infrastructure giant could not build a great technology business on its own and wondered what kind of a message was being sent to start-ups and credible entrepreneurs with the takeover attempt.

Posing 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," Natarajan had said in a press conference.

With PTI inputs


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Updated Date: Mar 26, 2019 16:16:14 IST