L&T picks up additional stake in Mindtree

Engineering major Larsen and Toubro (L&T) has increased its stake in software services firm Mindtree Ltd to 26.48% from 25.94%.

The Mumbai-based conglomerate said in a BSE filing it purchased about 9 lakh shares in Mindtree on the open market at Rs 979.81, or a total of around Rs 87 crore.

With the shareholding rising above 26%, L&T can now seek a board seat in Mindtree.

In one of the most high-profile hostile takeover bids in Indian corporate history, L&T had announced in March its intention to buy a 31% stake in Mindtree through an open offer after buying a few large shareholders. While L&T is looking to pick up another 15% from the open market, its plan is to hike its overall stake in the firm to 66%.  

Earlier this week, TechCircle had reported that the open offer for the Bengaluru-based IT firm had been delayed over queries posed to it by markets regulator the Securities and Exchange Board of India. L&T responded to SEBI’s queries only on May 10, as it had to wait for information from Mindtree.

The open offer was set to begin on May 14 and end on May 27, but it is not clear when it will commence. The process has also delayed the Mindtree Independent Director Committee's recommendation to the shareholders last Friday, as L&T's letter of offer has not been issued yet, awaiting SEBI's approval.
Mindtree’s open offer price has been set at Rs 980 per share.

Late last month, L&T had completed the purchase of almost 3.3 crore shares of the Bengaluru-based firm from its largest independent shareholder VG Siddhartha and two of his entities at Rs 980 apiece for more than Rs 3,200 crore for a 20% stake.

Mindtree's founders, who own a little more than 13% stake in the firm, had opposed L&T's bid and have been working with large investment firms to shore up their stake in the company.

Mindtree had crossed $1 billion in annual revenue in the last financial year. It reported a 9% growth in net profit at Rs 198 crore for the fourth quarter. Net revenue for the quarter through March jumped 25.6% to Rs 1,839.4 crore.

L&T has two entities that cater to technology customers -- L&T Technology Services and L&T Infotech. Last month, the Competition Commission of India (CCI) had approved L&T's proposal to take over the Bengaluru-headquartered IT services firm.