Mindtree wants a common minimum programme

BENGALURU: Mindtree is seeking a “common middle ground” with Larsen & Toubro that will benefit shareholders of both companies, its chairman said, even as the midsize IT firm awaits the recommendations of a committee of independent directors on an open offer announced by the engineering giant.“We understand that it is a reality (that) once the regulatory approval comes, L&T will be a large, or a reasonable, shareholder of us,” Krishnakumar Natarajan said, referring to L&T’s deal to buy a 20.32% stake in Mindtree from long-term investor VG Siddhartha. “In our history, we always treated shareholders with a lot of respect. We would (continue to) respect (them),” he said.He said “there is an opportunity to create long-term value” by working together, but to achieve that, both sides needed to engage in conversation and “work out something like a common minimum programme”.L&T signed the deal with Siddhartha, the Cafe Coffee Day promoter, on March 19 to buy his stake in Mindtree for Rs 3,269 crore. The announcement immediately triggered outrage at Mindtree, with its founders calling it a “hostile takeover” effort by the engineering company. Since then, both firms have tried to soothe each other’s nerves and look at a smoother transition.L&T’s deal with Siddhartha is awaiting approval from the Competition Commission of India. Last week, L&T came up with an open offer for 31% shares of Mindtree, which will give it a majority holding. The Mumbai-based company plans to buy another 15% from the open market.Mindtree board has appointed a panel of independent directors, led by Apurva Purohit, to review L&T’s open offer and recommend by May 10 whether its shareholders would benefit by selling their shares or not.Mindtree, which last week evinced interest for mutual discussion with L&T to understand the business strategies, said there wasn’t any progress on that yet.“There is no offer or specifics in terms of what does this mean, which I presume may be as the process of open offer is on it may not be appropriate to discuss what could be this,” said Natarajan.The tech services firm recently said it was confident of achieving the $1-billion revenue mark in fiscal 2019.The Mindtree chairman said there was “overwhelming support” from clients for the company and that it was business as usual, notwithstanding the noise over the hostile takeover bid. “We have reached out to clients and sort of explained to them the situations and, considering the excellent services they got from Mindtree in the past, we have had overwhelming support from clients,” he said.Natarajan rubbished claims that the founders were keen on retaining control. “It is beyond any individual or group’s interest,” he said. “There is a complete alignment (between the board and management) in terms of what are the actions we need to take to protect that long-term value generation. There is nothing about individuals or may be certain group of people— all of that is secondary.”

from Economic Times https://ift.tt/2HTwhqW