Mumbai: Global software major Mindtree on Tuesday has decided not to proceed with its proposal to buy back shares after infrastructure major Larson and Toubro (L&T) made an open offer to acquire 31 per cent of equity capital for Rs 5,030 crore. “The company’s board of directors at its meeting on March 26 has decided not to proceed with a buyback of equity shares of the company,” said Mindtree in a regulatory filing on the BSE. This comes after L&T offered to buy 5.13 crore Mindtree shares at Rs 980 each to add to the 20.32 per cent stake it agreed to buy from coffee baron V G Siddhartha.
The technology services and digital transformation company will also form a committee of independent directors (IDC) to evaluate L&T’s offer, it said in a statement. “After detailed deliberation and discussion, the board in its meeting today decided to immediately constitute the committee of IDC in the interest of all stakeholders to provide their reasoned recommendation in respect of the unsolicited offer by L&T for the consideration of the shareholders,” the statement said.
“As IDC members, the independent directors elected Apurva Purohit as chairperson and spokesman of the IDC, which will evaluate the offer, taking account facts, circumstances and the data of the company, the industry and the shareholders,” said the filing. The committee will also discharge the legal obligations of the independent directors under the regulations with respect to its recommendations on the L&T offer The hostile takeover bid which was shunned by Mindtree’s founders last week, who said it would not create value for the firm or its shareholders.
The committee will be supported by legal and financial advisors to help it with its deliberations, added the filing, quoting Mindtree Company Secretary S. Vedavalli. The Mumbai-based L&T has bought 20.4 per cent shares in Mindtree for Rs 3,300 crore at Rs 980 per share from Coffee Day Enterprise owner V.G. Siddhartha on March 18 and plans to acquire an additional 15 per cent in the secondary market through the stock exchanges. With the open offer, L&T hopes to have 66 per cent of the Mindtree equity stake by May. The offer opens on May 14 and closes on May 27.
