Infrastructure behemoth Larson & Toubro (L&T) Ltd on Tuesday offered to buy over 5.13 crore shares or 31% of IT major Mindtree's equity stake for Rs 5,030 crore at Rs 980 per share of Rs 10 face value.
"L&T has made an open offer to acquire 5,13,25,371 equity shares of Rs 10 face value, representing 31 per cent of the voting share capital from shareholders of Mindtree with an intention to take control of the target company," said the Bengaluru-based Mindtree in a regulatory filing on the BSE. The offer opens on May 14 and closes on May 27.
Axis Capital Ltd and Citigroup Global Markets India are the managers for the issue. The two-decade-old IT consulting firm informed L&T on March 22 that the outstanding units under the employee restricted stock purchase plan (ESOP) 2012 were 3,69,650 as on March 15.
"We understand that 13,51,673 convertible instruments of Mindtree, including the ESOP units are capable of being allotted during the offer and for determining the voting share capital in the open offer," noted the filing.The offer price (Rs 5,030 crore) will be paid in cash in accordance with the guidelines of the regulator Securities Exchange Board of India (SEBI). "If the aggregate responses to the offer are more than the offer size, then the offers from the shareholders will be accepted on a proportionate basis, in consultation with the issue managers," added the filing.
"The acquisition is expected to be value accreting for our shareholders as well as of Mindtree in the medium and long-term," L&T said in a statement from Mumbai.
"The object and purpose of acquiring controlling stake in Mindtree is aligned with our strategy to grow the revenue and profit of asset light services, business portfolio, thereby increasing the consolidated return on equity and diversifying the group revenue and profit into the IT services areas," added L&T in the statement.
Mindtree had a board meeting on Tuesday as well, where it decided that it would not be proceeding with the share buyback. In a filing that came soon after L&T's open offer, Mindtree said in a statement: "After detailed deliberation and discussion, the board, at its meeting today, decided to immediately constitute the Committee of Independent Directors (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."
Mumbai-based L&T has bought 20.4% 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.
With IANS inputs