MUMBAI | BENGALURU: Larsen & Toubro (L&T) is planning to sign a deal with Café Coffee Day founder VG Siddhartha to buy his 21% stake in MindtreeNSE 1.07 % and launch an open offer for an additional 31% stake in the IT company, probably as early as Monday evening, said several people aware of the developments.
Mindtree chairman and cofounder Krishnakumar Natarajan meanwhile warned against a hostile takeover bid in a letter to the L&T board on Saturday, these people said.
The engineering conglomerate is keen to act before Mindtree’s board meeting on Wednesday to consider a buyback proposal that’s seen as an attempt to thwart the L&T bid. Siddhartha is also expected to be in Mumbai on Monday.
L&T is likely to announce it has acquired his 20.4% stake and launch its open offer. The L&T offer price for another 31% stake may be around Rs 980 apiece, a 4% premium to Friday’s closing price of Rs 946. Citi and Axis Capital are said to be working on the open offer. KPMG Corporate Finance is the lead adviser to L&T.
An agreement with Siddhartha, the largest shareholder, is likely to scupper the buyback plan. Once he sells his stake, any change in capital structure will need a shareholder vote. In the normal course, a company can go for a buyback of up to 10% of its free reserves without shareholder approval.
Mindtree’s free reserves are estimated at Rs 2,800 crore. L&T is moving quickly as Standard Chartered Bank has agreed to lend Siddhartha Rs 3,000 crore to release his pledged Mindtree shares held with over a dozen banks and consolidate all of them under one entity.
Siddhartha had in several tranches pledged almost the entire 21% holding held by him and two affiliate firms to several domestic and foreign lenders including Yes Bank, Kotak Mahindra, RBL, Edelweiss, Standard Chartered a...
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Mindtree chairman and cofounder Krishnakumar Natarajan meanwhile warned against a hostile takeover bid in a letter to the L&T board on Saturday, these people said.
The engineering conglomerate is keen to act before Mindtree’s board meeting on Wednesday to consider a buyback proposal that’s seen as an attempt to thwart the L&T bid. Siddhartha is also expected to be in Mumbai on Monday.
L&T is likely to announce it has acquired his 20.4% stake and launch its open offer. The L&T offer price for another 31% stake may be around Rs 980 apiece, a 4% premium to Friday’s closing price of Rs 946. Citi and Axis Capital are said to be working on the open offer. KPMG Corporate Finance is the lead adviser to L&T.
An agreement with Siddhartha, the largest shareholder, is likely to scupper the buyback plan. Once he sells his stake, any change in capital structure will need a shareholder vote. In the normal course, a company can go for a buyback of up to 10% of its free reserves without shareholder approval.
Mindtree’s free reserves are estimated at Rs 2,800 crore. L&T is moving quickly as Standard Chartered Bank has agreed to lend Siddhartha Rs 3,000 crore to release his pledged Mindtree shares held with over a dozen banks and consolidate all of them under one entity.
Siddhartha had in several tranches pledged almost the entire 21% holding held by him and two affiliate firms to several domestic and foreign lenders including Yes Bank, Kotak Mahindra, RBL, Edelweiss, Standard Chartered a...
For more information Top 10 Stock Advisory Company Indore
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