Mindtree Chief Executive Officer Rostow Ravanan is likely to resign in the coming weeks with infrastructure major L&T becoming a majority shareholder in the mid-sized IT company, according to sources. Larsen and Toubro (L&T) had initiated a hostile takeover of Mindtree Ltd in March and has since then expanded its shareholding to a majority stake with large investors, like Nalanda, selling their shares in the ongoing open offer.
Mindtree founders had resisted the bid and had tried rallying support from Singapore-based Nalanda Capital and others.
One of the sources said Mindtree founders had supported Ravanan's continuation to ensure business continuity but given the developments over the past few weeks, Ravanan will expected to step down from his role in the coming weeks.
E-mails sent to Mindtree did not elicit any response.
Another source said the founders, which include Subroto Bagchi, N S Parthasarathy and Krishnakumar Natarajan (who together hold about 13 per cent), may look at selling their shares as well in the open offer that concludes on June 28.
Interestingly, L&T has recently secured three board positions at Mindtree that has eight members on the board (of which four were independent directors).
Mindtree co-founder Subroto Bagchi did not offer being considered for re-appointment to the board. The IT firm remained silent on how it plans to accommodate the three new L&T representatives.
In March, L&T had said it will buy 20.32 per cent stake in Mindtree from VG Siddhartha and his coffee enterprise for over Rs 3,000 crore, marking India's first-ever hostile takeover bid in the IT space.
Since then, L&T has steadily increased its holding in the Bengaluru-based tech firm to about 30 per cent. L&T is currently in the process of an open offer to buy an additional 31 per cent stake.
The open offer, with an offer price of Rs 980 per share, opened on June 17 and is slated to close on June 28. If the offer of 5.13 crore shares is subscribed fully, the engineering behemoth will end up with a 66.32 per cent holding in Mindtree.
As of June 26, L&T's open offer had received bids for 4.83 crore shares or 94.16 per cent of the offer.