IT services firm Mindtree, which is resisting a Rs 10,700-crore takeover bid from Larsen and Toubro (L&T) on Wednesday adjourned its board meeting convened to consider a share buyback, to a future date.
In a stock exchange filing on Wednesday, Mindtree said, “The Board considered the proposed buyback of equity shares of the company at its meeting held on March 20, 2019. Following detailed discussions, the meeting has been adjourned to a future date. No decision has been taken in relation to the proposed buyback of equity shares”.
On Monday L&T had announced that, it has entered into an definitive share purchase agreement (SPA) with VG Siddhartha and his related entities — Coffee Day Trading Limited and Coffee Day Enterprises Limited to acquire a 20.32% stake in Mindtree at `980 per share, aggregating to approximately `3,269 crore and stating their intention to buy another 15% of the share capital in an open market purchase. L&T also plans to make an open offer for another 31% at `980 per share share, taking the total transaction valued at about `10,700 crore for a near 67% stake.
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Facing resistance from the Mindtree promoters to its takeover plan, L&T a day later made overtures to the former stating that it will continue to operate the company as an independent company with no immediate plans of merging it with its services companies (L&T Infotech and L&T Technology Services). However, Mindtree promoters continued to maintain their stand. In a press conference on Tuesday they said that the culture of the two organisations are very different and any integration is not possible.
They also asked why L&T could not build its own IT company. “You are a company with a turnover of `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?” Mindtree’s executive chairman, Krishnakumar Natarajan had asked.
Mindtree had told analysts on Tuesday that it has unequivocal support from its institutional investors, which hold nearly 40.2%, as well as all stakeholders including employees, clients and the others. However, the company management denied being in talks with any financial or strategic investor at this stage.