Mindtree CEO Rostow Ravanan Said To Resign As L&T Nears Takeover
L&T is closing in on a takeover after acquiring a majority stake in Mindtree.
Mindtree Ltd.'s Chief Executive Officer Rostow Ravanan is likely to resign in the coming weeks, people familiar with the development said, in the wake of Larsen & Toubro Ltd. closing in on a takeover after acquiring a majority stake in the IT company.
Mindtree founders have supported Ravanan’s continuation as CEO to ensure business continuity, but given the developments over the past few weeks, he is expected to step down soon, said one of the people cited above.
E-mails sent to Mindtree did not elicit any response.
L&T had in March mounted a hostile takeover bid for Mindtree and has since expanded its shareholding to a majority stake with large investors, like Nalanda Capital, selling their shares in the ongoing open offer.
Mindtree founders had resisted the bid and had tried rallying support from Singapore-based Nalanda Capital and others.
According to another source, the founders including Subroto Bagchi, NS Parthasarathy and Krishnakumar Natarajan may look to sell their stakes in the open offer that concludes on June 28. They together hold 13 percent in the company.
Interestingly, L&T recently secured three positions at the eight-member Mindtree board, which includes four independent directors. The IT firm remains silent on how it plans to accommodate the three new L&T representatives.
As part of three-step hostile takeover bid, L&T in March bought 20.32 percent stake in Mindtree from VG Siddhartha and Coffee Day Enterprises Ltd. for over Rs 3,000 crore. Since then, L&T has steadily increased its holding in the company by buying shares in the open market. L&T is currently in the process of an open offer to buy an additional 31 percent stake in the IT firm.
The open offer, where Mindtree shares are being offered at Rs 980 apiece, opened on June 17 and is slated to close on June 28. If the offer of 5.13 crore shares is subscribed fully, L&T will end up with a 66.32 percent stake in Mindtree. As of Wednesday, L&T's open offer had received bids for 4.83 crore shares, or 94.16 per cent of the offer.