June 25, 2019 / 11:25 AM / a month ago

UPDATE 1-India's L&T buys controlling stake in Mindtree - CNBC TV18

(Adds details of bid, background)

BENGALURU, June 25 (Reuters) - Indian conglomerate Larsen and Toubro Ltd (L&T) has acquired a controlling stake in IT services company Mindtree Ltd, CNBC TV18 channel reported citing sources.

The report comes within months of Mindtree rejecting a hostile takeover bid from L&T, saying that the plan was of no value for the firm or its shareholders.

L&T’s hostile bid to acquire a controlling stake in Mindtree is the first in India’s software services industry and is rare in India’s corporate sector, where unsolicited suitors are usually deterred by founders with large shareholding.

The Mumbai-based construction giant increased its stake in Mindtree to 51%, the channel reported, adding L&T got over 21% stake through open offer so far.

In March, L&T bought a fifth of Mindtree from coffee baron V.G. Siddhartha and companies related to him for 32.69 billion rupees ($474.73 million) and said it planned to raise its stake to 66%.

As of March 19, Mindtree founders, including Executive Chairman Krishnakumar Natarajan and Chief Executive Rostow Ravanan owned a combined 13.3% stake in the company.

Since March, L&T kept buying stake in Mindtree from its promoters and through an ongoing open offer. Mint newspaper reported here Singapore-based Nalanda Capital on Monday sold its entire 10.61% stake in the IT services firm to L&T in the offer.

Mindtree was not immediately available to comment, while L&T declined to comment on the matter. (Reporting by Derek Francis in Bengaluru; Editing by Rashmi Aich)

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