New Delhi: Indian conglomerate Larsen & Toubro Ltd (L&T) has signed a deal with Cafe Coffee Day (CCD) founder VG Siddhartha to buy his 20.32 percent stake in Mindtree at Rs 980 per share for Rs 3,269 crore.
"L&T has today entered into a definitive Share Purchase Agreement (SPA) with VG Siddhartha and his related entities namely, Coffee Day Trading Limited and Coffee Day Enterprises Limited, to acquire 20.32 percent stake in Mindtree. L&T will purchase this stake at a price of Rs 980 per share, aggregating to approximately Rs 32.69 billion," the company said in an exchange filing.
The acquisition is subject to necessary regulatory approvals and satisfaction of other conditions as specified in the offer documents.
L&T has also announced an open offer to the public shareholders of Mindtree to purchase up to an additional 31 percent of the outstanding shares of Mindtree at a price of Rs 980 per share in cash, it said.
On March 14, sources told CNBC-TV18, that L&T approved the acquisition of Siddhartha's 20.4 percent stake in Mindtree at Rs 981 per share.
"This acquisition is part of our strategy to deliver industry leading IT services to our clients worldwide. It will help propel L&T's technology portfolio into top tier of Indian IT companies. This acquisition will allow L&T to further enhance shareholder value for both its own shareholders and Mindtree shareholders in the medium to long term," said SN Subrahmanyan, CEO and managing director, L&T.
Founders Subroto Bagchi and Krishnakumar Natarajan, the chairman, and Rostow Ravanan, the CEO of the company, on Monday, wrote a letter to the L&T board, asking the firm to "cease pursuing Mindtree as a potential target" and alleged that the construction major is signing up for a 'hostile takeover'.
Bagchi also announced his resignation his government post — head of Odisha's Skill Development Authority — to save his company from the "threat of hostile takeover" on Twitter on Sunday.
To avert the acquisition, Mindtree scheduled a share buyback proposal meeting on March 20.
However, Ashok Soota, another co-founder of Mindtree, in an interview with CNBC-TV18, said the share buyback plan will not be able to dent L&T's effort to acquire Cafe Coffee Day founder VG Siddhartha's stake in the IT company.
Soota said that he does not see the shares buyback achieving much from founders' standpoint, adding that it looks only a part of the financial strategy.
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