CCI approves L&T's bid to acquire two-thirds stake in Mindtree

Heating up the ongoing battle between L&T and Mindtree, the Competition Commission of India (CCI) had given its approval to the Mumbai-based engineering and construction conglomerate’s proposed acquisition of a 66.15% stake in Bengaluru-based IT/ITeS firm Mindtree:

On March 19, L&T had a signed a deal with Mindtree’s largest shareholder, VG Siddhartha - the owner of Café Coffee Day - to purchase 20.32% of his stake in Mindtree. The entire deal was worth Rs. 3200 Crore at Rs.980 per share. The conglomerate had also offered to directly buy 31% of Mindtree following it up with an additional 15% on-market purchase offer. The entire hostile takeover was valued approximately at Rs.11,000 crore.

Mindtree's founders, who hold 13.32% shares, had initially condemned the hostile bid. Following L&T's bid, one of Mindtree's founding fathers resigned from his government post as head of Odisha Skill Development Authority tweeting:

In an attempt to save his company from L&T, he returned to Mindtree tweeting:

While they had initially intended to issue a buyback plan - where they would attempt to purchase shares back from current investors to retain majority control, they later rolled this back after L&T issued a public statement announcing their open offer on March 26. The statement declared L&T’s object and purpose of the acquisition of a controlling stake in Mindtree is to grow the revenue and profits of its information technology service areas.

Following this announcement, Mindtree constituted a committee of four independent directors to review the open offer and advise stakeholders on L&T’s offer and submit its decision by May 10. On April 3, the members of this committee have roped in Khaitan & Co and ICICI Securities for assisting the committee in coming up with recommendations.