Mindtree co-founders condemn L&T takeover plan, will stay 'unconditionally opposed'

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26 Aug, 2025 12:21

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Mindtree's leadership continues to resist the hostile takeover, a first in India’s IT sector, from construction major Larsen & Toubro (L&T), which the latter announced on March 18.

With the announcement, L&T has put an end to market speculation regarding its acquisition of VG Siddhartha’s 20.32 percent stake. According to media reports, the infrastructure major is also looking to increase its stake in Mindtree to 66.32 percent. This includes an acquisition of 31 percent shares through an open offer to public shareholders.

This is not the first time that L&T has attempted to take over an IT company. Its earlier attempt to buy scam-tainted Satyam Computer Services, after Chairman Ramalinga Raju confessed that the company's accounts had been falsified, failed.

Both sides, L&T in Mumbai and Mindtree in Bengaluru, are holdings conferences later on March 19.

What are the options left for Mindtree?

The Mindtree board had called for a meeting on March 20 to discuss the buyback, which is pointless now as L&T announced its acquisition two days prior. This means that company cannot use 10 percent of its reserves for the share buyback programme.

To fend-off the takeover and retain control in the company, analysts say the company needs an investor with enough financial muscle to counter the L&T bid. The latter has offered Rs 980 per share, which values Mindtree at Rs 16,000 crore.

Ashok Soota, a co-founder, told Times of India, said, “The founders would require a combination of financial strategies to retain control and I am sure they will actively explore (the same).”

Continued resistance from promoters

Mindtree's promoters, including Krishnakumar Natarajan (Executive Chairman), Subroto Bagchi (co-Founder), Rostow Ravanan (CEO) and Parthasarathy NS (Executive Vice Chairman and COO), said in a statement, “The attempted hostile takeover bid of Mindtree by L&T is a grave threat to the unique organisation we have collectively built over the last 20 years.”

“A hostile takeover by L&T, unprecedented in our industry, could undo all of the progress we have made and immensely set our organisation back. We don’t see any strategic advantage in the transaction and strongly believe that the transaction will be value destructive for all shareholders,” it said.

“We remain 100 percent committed to our long-term vision of building an independent company. We believe it’s in the best interests of our shareholders, Mindtree Minds, and our organisation overall to continue opposing this takeover attempt,” the statement added.

Scott Staples, who was a co-founder when the company started in 1999, tweeted, “In my 18 years at Mindtree, we never lost a single deal to L&T - not a single one - customers could tell the difference - why buy from an unimaginative shrub when you can buy from a magnificent tree? #MindtreeMatters.”