L&T reached the open offer trigger point by increasing its total holding in Mindtree to 25.93 per cent on Thursday. It is on the verge of reaching the critical 26 per cent-level, which will ensure it a board seat in the firm.
According to bulk deal data available with the NSE, L&T on Thursday bought over 3.30 million shares (2.01 per cent of Mindtree’s total share base), at an average price of Rs 980. The data didn’t provide any details about the seller. According to Securities and Exchange Board of India (Sebi) norms, when the acquirer holds 25 per cent stake in the target company, it has to mandatorily make an open offer for shareholders.
After concluding the purchase of 20 per cent stake from Coffee Day founder V G Siddhartha, L&T is in the process of buying another 15 per cent stake in Mindtree through open market transactions. On Wednesday, it bought 2.29 per cent stake in Mindtree for Rs 368.4 crore with Rekha N Shah — wife of ace investor and Enam co-founder Nemish Shah — being one of the principal sellers. So far, L&T has already bought 5.94 per cent stake in its bid to reach the 26 per cent shareholding mark.
By the end of March, domestic mutual funds had 9.02 per cent stake in Mindtree, with the combined holding of FPIs (foreign portfolio investors) being 39.26 per cent. Stakes of corporate bodies during this period stood at 23.41 per cent.
Mindtree’s panel of independent directors is in the process of evaluating the open offer proposal, and will give its recommendations by May 10. The open offer will begin on May 14 and close on May 27.
However, people in the know said pending Sebi approval for the open offer, the Independent Directors’ Committee (IDC) might delay its recommendations.
L&T is pursuing a controlling stake of 66 per cent in the mid-tier IT firm for around Rs 10,700 crore. However, the unsolicited takeover attempt is being opposed by Mindtree founders, who seek more clarity on L&T's plan.