Mindtree promoters KK Natarajan, Rostow Ravanan and Subrato Bagchi were pulled up by the company's board for their language against Larsen and Toubro (L&T) after the latter initiated a takeover of the company with a purchase of 20.3 percent stake of VG Siddhartha and announcing plans to take the stake up to 66 percent.
The three Mindtree promoters had held a press conference in Bengaluru a day after the stake sale was signed between Siddhartha and L&T on March 18, in which they unanimously called infrastructure giant’s takeover bid hostile and also painted L&T as being against entrepreneurship, while also claiming that the takeover would be value destructive for Mindtree.
In a social media post and a letter to employees, Bagchi said he would “protect the Tree from people who have arrived with bulldozers & saw chains to cut it down so that in its place, they can build a shopping mall.”
These references did not sit well with the Mindtree board members, who felt that with L&T becoming the single largest shareholder in the company post the stake purchase, they should be respected accordingly.
The board members conveyed this to the Mindtree promoters at the board meeting that followed on March 20, sources tell CNBC-TV18, and also asked that they keep their emotions and language in check.
Over the past weeks, there has been a noticeable change in tone of the Mindtree management, who even in interviews with CNBC-TV18, said that they will respect L&T as a major shareholder and that they would want to come to a middle ground with them.
However, there is still a lack of clarity on whether there has been any communication between the management at L&T and Mindtree on the plans for integration, given that Mindtree promoters have maintained that they have not received any such formal communication from L&T.
“The entire board is completely aligned with the Mindtree management team and all steps we have taken so far. Any report to the contrary is completely baseless. All of us at Mindtree are continually focused on creating value for all our stakeholders. Our strategy and culture have been core components of our successes,' Mindtree said in a statement.
The Mindtree board had last week set up an independent directors' committee (IDC) to evaluate the L&T offer, comprising Apurva Purohit of Jagran Group, Bijou Kurien, who was part of Titan founding team, Milind Sarwate, founder of Increate Value Advisors and Akshaya Bhargava, founder of Bridgeweave.
Sources privy to the developments told CNBC-TV18 that there is a consensus within the IDC that the value of Rs 980 per share is low. CNBC-TV18 had reported that L&T had earlier offered VG Siddhartha as much as Rs 1,200 per share on the condition that he bring in support from the Mindtree management, which did not work out.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Why Google CEO is cautiously optimistic about the election year
May 16, 2024 9:51 AM
Mark Mobius reveals how markets will react if NDA wins 400+ Lok Sabha seats
May 15, 2024 8:09 PM
Wine shops and bars to remain shut for 4 days in Mumbai in 4 weeks, check details
May 15, 2024 7:52 PM
INDIA bloc will win majority seats in Bihar, says Tejashwi Yadav
May 15, 2024 4:20 PM