IT services firm Mindtree's board on Wednesday deferred its decision on the proposed buyback of shares to a later unspecified date.
"The board considered the proposed buyback of equity shares of the company at its meeting. Following detailed discussions, the meeting has been adjourned to a future date," the city-based company said in a BSE filing.
"No decision has been taken in relation to the proposed buyback of equity shares," the firm said.
The details of when the next board meeting will be held were not disclosed.
The board meeting on Wednesday came in the backdrop of diversified conglomerate Larsen and Toubro Ltd's (L&T) bid to take it over.
The L&T on Monday bought a 20.4 per cent stake in Mindtree from Cafe Coffee Day founder V.G. Siddhartha for about Rs 3,300 crore.
The company had said it would also buy additional stake in Mindtree through an open offer. A draft open offer filed with the BSE stated that L&T would make a detailed public statement about the open offer on or before March 26.
According to an Economic Times report, board members reportedly asked the promoters to consider L&T’s offer and also asked them to negotiate a higher price for the shares.
However, if Mindtree goes for a buyback, that could increase the cost of acquisition for L&T.
According to a Mint report, Mindtree founders are claiming that for now they have support from Mindtree’s large institutional investors, which hold a combined 20.2%. This means that, if these institutional investors oppose the deal as well, it would mean that Mindtree shareholders with 33.52% of voting rights are against L&T’s takeover bid. This 33.52% also includes 13.32% of the promoters’ stake.
The three founders of the company have strongly opposed the deal and maintained that L&T’s attempt was unprecedented, that it offered no strategic advantage and that the transaction will be value destructive for all shareholders.