Larsen and Toubro Ltd (L&T) on Thursday purchased 880,000 shares of Mindtree Ltd, raising its stake in the IT services firm from 25.94% to 26.48%.
L&T said in an exchange filing that it bought the shares at ₹979.81 on a day when Mindtree’s stock closed 0.53% higher at ₹980.25 on BSE. With its stake crossing 26%, L&T is in a position to demand a board representation in Mindtree.
The engineering behemoth is in the process of taking over Mindtree, with a plan to buy up to 66.32% shares of the company for up to ₹10,700 crore, in the first hostile takeover in India’s IT industry.
According to the plan submitted in a draft letter of offer to the Securities and Exchange Board of India, or Sebi, and the exchanges on 2 April, L&T, after buying a 20.32% stake jointly held by Café Coffee Day founder V.G. Siddhartha and two of CCD’s associate firms, had said that it intended to buy an additional 15% from the open market and another 31% through an open offer at ₹980 per share.
The open offer was originally proposed to open on 14 May and close on 27 May.
However, L&T was compelled to postpone its open offer by at least a fortnight after the markets regulator sent the draft offer letter back to L&T with a set of queries on the proposed takeover. On 10 May, L&T submitted its response to Sebi.
If Sebi does not raise further queries and approves the draft letter of offer by 17 May, L&T will initiate the open offer process and file its final letter of offer.
Once the draft letter of offer is approved, Mindtree’s independent directors have to be given at least two working days to provide recommendation to the shareholders. At least two days after that, the open offer can be launched. The entire process will take at least two weeks. Therefore, the open offer may actually be launched either at the end of this month or early June.
However, irrespective of the open offer, L&T will continue to purchase Mindtree shares from the public during trading hours until it finishes buying the planned 15% from the open market.