SEBI approves L&T's open offer for Mindtree: Reports

SEBI approves L&T's open offer for Mindtree: Reports
Mindtree founder promoters at a press conference
31 May, 2019

The Securities and Exchange Board of India (SEBI) has approved engineering major Larsen and Toubro's open offer to buy Mindtree shares, media reports said.

The open offer to acquire a 31% stake in Mindtree was scheduled to start early this month but was delayed as SEBI had asked for a few clarifications from L&T. With the approval, the open offer might begin in the middle of June, The Times of India reported. Business news channel CNBC-TV18 said the open offer would begin on June 16.

Mumbai-based L&T has been steadily buying Mindtree shares from the open market even as the open offer got delayed by almost a month, with its current stake standing at 28.88%. The open offer price has been set at Rs 980 per share and there is no change expected in the buying price.

Late last month, L&T had completed the purchase of almost 20% stake in the Bengaluru-based firm from its largest shareholder VG Siddhartha and two of his entities at Rs 980 apiece for more than Rs 3,200 crore.

L&T had announced in March its intention to buy a 31% stake in Mindtree through an open offer after buying out a few large shareholders. L&T is looking to pick up another 15% from the open market as part of its plan is to hike its overall stake in the firm to 66%.

The deal is one of the most high-profile hostile takeover bids in Indian corporate history.  Mindtree's founders, who own a little more than 13% stake in the firm, had opposed L&T's bid.

Mindtree had crossed $1 billion in annual revenue in the last financial year. It reported a 9% growth in net profit at Rs 198 crore for the fourth quarter. Net revenue for the quarter through March jumped 25.6% to Rs 1,839.4 crore.

L&T has two entities that cater to technology customers -- L&T Technology Services and L&T Infotech. Last month, the Competition Commission of India had approved L&T's proposal to take over Mindtree.