Mindtree founder shifts focus to Cafe Coffee Day; L&T, Baring leading race to acquire major stake

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Published: March 1, 2019 7:59:34 PM

Larsen & Toubro and Baring are both offering 950 to 1,000 rupees a share and a decision may come as soon as next week, one of the people said, asking not to be identified because the matter is private.

Mindtree, Mindtree shares, Larsen & Toubro Infotech Ltd, Cafe Coffee Day, Baring Private Equity Asia, Mindtree LtdMindtree’s management would prefer the stake not go to Larsen & Toubro because of competitive tensions, one of the people said.

Larsen & Toubro Infotech Ltd. and Baring Private Equity Asia are the leading bidders for a major stake in Mindtree Ltd., as the Indian tech services and consulting firm’s largest shareholder seeks to sell his holding, according to people familiar with the matter.

Larsen & Toubro and Baring are both offering 950 to 1,000 rupees a share and a decision may come as soon as next week, one of the people said, asking not to be identified because the matter is private. V.G. Siddhartha, the largest shareholder in Mindtree, is selling a stake of about 20 percent that he holds through Coffee Day Enterprises and affiliated entities. The deal would be valued at about 34 billion rupees ($480 million) at the top of the price range.

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Other suitors including private equity firm KKR & Co. remain interested, the people said. No final decision has been made and the companies could still decide against pursuing a deal. Baring declined to comment. Larsen & Toubro Infotech, KKR and the office of V.G. Siddhartha did not respond to requests for comment.

Siddhartha is selling the stake as he shifts his attention from technology consulting to an expansion of his Cafe Coffee Day business. The chain is challenging Starbucks in India and is aiming to expand to more than 2,000 stores in the next few years. Mindtree competes with Larsen & Toubro, Infosys Ltd. and other rivals in supporting corporate customers that need tech expertise.

Mindtree’s management would prefer the stake not go to Larsen & Toubro because of competitive tensions, one of the people said. However, that may not prove the deciding factor, the person said.

Mindtree shares have climbed about 8 percent this year and rose 2.5 percent in Friday trading.

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