Global software major Mindtree on Tuesday decided not to proceed with its proposal to buy back its shares after infrastructure major Larson and Toubro (L&T) made an open offer to acquire 31 per cent of equity capital for Rs 3,050 crore.
“The company’s board of directors at its meeting on March 26 has decided not to proceed with a buyback of equity shares of the company,” said Mindtree in a regulatory filing on the BSE.
The board, however, invited views from the directors on the unsolicited offer made by L&T for the company’s equity shares.
Earlier in the day, L&T offered to buy over 5.13 crore shares or 31 per cent of Mindtree’s equity stake for Rs 5,030 crore at Rs 980 per share of Rs 10 face value.
“L&T has made an open offer to acquire 5,13,25,371 equity shares of Rs 10 face value, representing 31 per cent of the voting share capital from shareholders of Mindtree with an intention to take control of the target company,” Mindtree said in an earlier filing on the BSE.
The offer opens on May 14 and closes on May 27.
The Mindtree board also decided to set up a committee of independent directors (IDC) to recommend its views on the L&T offer for the consideration of the shareholders.
“As IDC members, the independent directors elected Apurva Purohit as chairperson and spokesman of the IDC, which will evaluate the offer, taking account facts, circumstances and the data of the company, the industry and the shareholders,” said the filing.
The committee will also discharge the legal obligations of the independent directors under the regulations with respect to its recommendations on the L&T offer
The committee will be supported by legal and financial advisors to help it with its deliberations, added the filing, quoting Mindtree Company Secretary S. Vedavalli.
The Mumbai-based L&T has bought 20.4 per cent shares in Mindtree for Rs 3,300 crore at Rs 980 per share from Coffee Day Enterprise owner V.G. Siddhartha on March 18 and plans to acquire an additional 15 per cent in the secondary market through the stock exchanges.
With the open offer, L&T hopes to have 66 per cent of the Mindtree equity stake by May.