L&T offers Dil & Pyar, Mindtree founders say ‘let’s spar’

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Not a ‘hostile takeover’ insists Larsen & Toubro CEO S.N. Subrahmanyan; grave threat to a unique organisation, says IT firm

A day after acquiring 20.32% stake in Mindtree, engineering and construction major L&T tried to woo promoters, employees and other stakeholders of the IT firm. This, even as Mindtree’s promoters unconditionally opposed L&T’s ‘hostile’ takeover. L&T MD and CEO S.N. Subrahmanyan said, “Please understand, this ‘hostile’ word is not for us. We believe in ‘Dil’ (Heart) and ‘Pyar.’ (Love). We have not attempted any hostile takeover on anyone. It was a significant shareholder [V.G. Siddhartha] of MindTree, who has persuaded us to invest in Mindtree and that’s what we have done. We have invested our very hard-earned money where there is lot of emotion, passion, sweat, blood and tears are involved. So we see it with Dil and Pyar.”

‘No integration’

“I reassure Mindtree promoters that the company will be a professionally-managed company with L&T oversight. We are not planning any integration and Mindtree will remain Mindtree. L&T is an 80-year-old company… our chairman got Padma Vibhushan, it shows the culture and the value. We have 1,13,000 employees. I think MindTree promoters should look at it very positively.

L&T is the best house for Mindtree,” Mr. Subrahmanyan added. He claimed that Mindtree’s single largest shareholder, V.G. Siddhartha, had approached L&T in this regard a few years ago, but the firm was not keen then.

In December, Mr. Siddhartha had again approached L&T as he wanted to sell his stake to a group that had good governance standards as he had lots of emotion attached to Mindtree, the company he co-founded.

“We looked at it three-four times. It was an opportunity, meeting of minds. From a business point of view, L&T Infotech is into banking, financial services, oil and gas, while Mindtree is more into hospitality, travel, etc.,” Mr. Subrahmanyan said.

When asked what would be the minimum stake that L&T would be comfortable with at Mindtree, he said, “We are going to make an open offer and we need at least 26% stake, otherwise our board will not allow the investment to go further.”

Meanwhile, the promoters of Mindtree — Krishnakumar Natarajan, Subroto Bagchi, Rostow Ravanan and Parthasarathy N.S. — in a joint statement said, “The attempted hostile takeover bid of Mindtree by Larsen & Toubro is a grave threat to the unique organisation we have collectively built over 20 years. Since we started the company in 1999, we have built a rock-solid organisation that outperforms its peers. We’ve also carefully created a differentiated corporate culture made up of our amazing ‘Mindtree Minds’, which reached the 20,000 milestone this year.”

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