L&T Garners Majority Stake In Mindtree, Takeover Nears Completion
Once the Mindtree open offer ends on June 28, L&T’s stake in Mindtree will cross 59.50 percent.
Larsen & Toubro Ltd. has acquired a majority stake in software services firm Mindtree Ltd., bringing its three-step takeover—aimed at deploying cash better—closer to completion.
Mindtree shareholders have tendered 30.5 percent stake so far in the open offer for 31 percent launched by L&T, according to disclosure to exchanges. L&T acquired 19.9 percent from VG Siddhartha and Coffee Day Group, and 8.9 percent from the market. Once the Mindtree open offer ends on June 28, its holding will cross 59.5 percent.
That will culminate the acquisition of the mid-sized software services provider. The deal is aimed at deploying cash better after L&T’s buyback to reward shareholders was rejected by the regulator citing rise in its leverage.
Investors chose to tender shares in the open offer that at Rs 980 apiece was priced higher than the prevailing market price of Mindtree.
Institutions, which own 56.1 percent stake, tendered nearly 28.4 percent in the Mindtree open offer. Foreign institutional investors alone tendered 21.4 percent, followed by mutual funds at 6 percent.
As of March, the largest foreign shareholders included Nalanda India Fund Ltd. with 10.61 percent and Amansa Holdings Pvt. Ltd. with 2.77 percent.
Among mutual funds, UTI Equity Fund, L&T Mutual Fund Trustee, DSP Midcap Fund and Franklin Templeton Mutual Funds own more than 1 percent each. It’s not clear if they participated in L&T’s open offer. Still, data of tendered shares available on the stock exchanges points to some of the large institutional investors having participated in the open offer.
L&T is seeking to appoint its three nominees—SN Subrahmanyan, Ramamurthi Shankar Raman and Jayant Damodar Patil—on the Mindtree board.
Mindtree’s board has sought shareholder nod to appoint two independent members Prasanna Rangacharya Mysore, who is also on the board of L&T Hyderabad Metro Rail, and Deepa Gopalan Wadhwa.
Shareholders will vote on these proposals at the annual general meeting scheduled for July 16. They will also vote on the final dividend of Rs 4 per share and a special dividend of Rs 20 per share announced by the company.
On Wednesday, L&T shares rose 1.03 percent to Rs 1,550.85 apiece on the BSE while those of Mindtree fell 1.74 percent to Rs 936.15. The benchmark Sensex gained 0.40 percent to end the day at 39,592.08 points.