L&T is not allowed to go further with an open offer plan without SEBI’s permission on or before 13 May
The company is planning to increase its stake in Mindtree to 66.32% by spending almost Rs 10,800 crore
Reports confirm that Larsen & Toubro, the Indian engineering and construction conglomerate, had recently made an open offer for acquiring 31% stake in Mindtree, a Bengaluru-based IT company. The offer, which was set to start on May 14, has now been postponed as market regulator SEBI is yet to give approval for it.
Apparently, this week, the capital market watchdog of India is anticipated to announce its decision on the L&T open offer. According to corporate governance experts, L&T is not allowed to go further with an open offer plan without SEBI’s permission on or before 13 May, owing to the restrictions placed by SEBI.
Sources familiar with the matter mentioned that L&T had reached the trigger point to begin an open offer on 10 May after it raised its stake in the mid-sized software company Mindtree to 25.93%. But the company had missed a due date to issue its letter of offer to Mindtree shareholders which is probably going to delay the open offer plan.
Seemingly, L&T is planning to increase its stake in Mindtree to 66.32% by spending almost Rs 10,800 crore, through an open market acquisition of 15% and an open offer for 31%. The open offer is managed by Citi Global and Axis Capital. The offer is priced at Rs 980 per share by the company and is set to start on May 14, closing on May 27.
In the meantime, the independent directors committee of Mindtree that was established to give their rational recommendation on the unsolicited offer by L&T on 10 May, is yet to come up with its proposals, sources said. The committee, led by Apurva Purohit, an independent director on the boards of Mindtree, will give their rational recommendation with respect to the unsolicited offer by L&T for being considered by the shareholders.