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Mark To Market First Ever in IT History "Charm of a Tree"




Mindtree, one of the fast growing software company got undemended attention from one of the engineering giants.L&T infotech one of the tech arm, would largely benefit with the consolidation deal. So taking a big leap, there took place first time in the history of India's IT Industry what is commonly known as "Hostile Takeover" at a handsome sum of 10700Cr, for a whooping 66.32% of Shareholding.

Hostile Takeover Impact on transaction parties :-

 V.G. Siddhartha:- was compelled to sell his stake due to liquidity crunch which triggered by defaults in payments by Infrastructure Leasing and Financial Services Ltd (IL&FS) in August. Another reason is to finance the expansion of his coffee venture Coffee Day Enterprises that runs the Café Coffee Day chain.

 L&T:-  Return on equity (RoE) expansion on account of purchase of non-core business is not the preferred way for L&T shareholders, as it risks long term de-rating of core business. This also limits the scope of buyback going forward as the cash will be exhausted. 

 Mindtree:-Risk to growth/relationship in one/multiple accounts cannot be completely ruled out.
6/12-Mindtree Ltd’s largest investor and Café Coffee Day’s (CCD) founder V.G. Siddhartha, two firms controlled by him and a few other large shareholders are looking to sell their stakes in the Bengaluru-based software services company. Private equity firm KKR and Co. has evinced interest in buying a large stake 

 22/12-Baring Private Equity Asia Ltd has emerged as the front-runner in the race to buy the 21% stake of Coffee Day Enterprises Ltd, its founder V.G. Siddhartha and affiliate entities in Mindtree Ltd for at least ₹ 3,300 crore, 


 22/1-Engineering and construction conglomerate Larsen and Toubro Ltd (L&T) has initiated talks to acquire a stake in Mindtree Ltd, joining two private equity (PE) firms and Japan’s NEC Ltd which have also shown interest in the software services company.

 29/1-At Mindtree Ltd, a hostile takeover is unlikely, thanks to influential investors such as Baburaj Pillai, who are believed to be backing the current management.

 25/2-Private equity firm KKR and Co. has offered ₹3,100 crore to buy the stake held by Café Coffee Day (CCD) founder V.G. Siddhartha and his two firms in information technology (IT) services firm Mindtree Ltd.

 12/3-The deal could trigger a hostile takeover bid, leading to an open offer by L&T, India’s largest engineering company, to increase its stake to 51%.
16/3-Mindtree Ltd’s board will meet on 20 March to consider a proposal to buy back its fully paid-up equity shares from the market.

 18/3-“L&T will buy the 20.4% stake and will announce an open offer to buy up to 51% in Mindtree on Monday evening.

 20/3-  Mindtree Ltd’s founders claiming the support of large institutional investors, which between them hold 20.25%, implying that shareholders with 33.52% of voting rights are opposed to Larsen and Toubro Ltd’s (L&T's) hostile takeover bid.

 21/3- No decision has been taken in relation to the proposed buyback of equity shares," Mindtree said in a statement sent to stock exchanges on Wednesday.

 26/3-Larsen & Toubro Ltd (L&T) made an open offer on Tuesday to acquire a 31% stake in IT services firm Mindtree Ltd for ₹5,030 crore ($730.20 million).

 26/3-The board of IT services firm Mindtree, which is facing a hostile takeover bid from L&T, today decided not to proceed with the buyback of equity shares of the company. 
 6/4-The Competition Commission of India (CCI) on Friday approved Larsen and Toubro Ltd's (L&T's) takeover bid for Mindtree Ltd. The engineering conglomerate purchase up to 66.32% stake in the Bengaluru-based IT services firm for around₹10,700 crore, is the first hostile takeover bid in the Indian IT industry. Two persons with direct knowledge of the CCI approval for the L&T-Mindtree deal confirmed the development.
Source:-Mint

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