India's L&T to spend up to $1 billion in hostile Mindtree takeover-report

BENGALURU (Reuters) - Indian conglomerate Larsen & Toubro (L&T) will spend up to 70 billion rupees ($1.02 billion) in a hostile bid to buy IT services company Mindtree Ltd, the Times of India (TOI) reported, citing sources directly involved in the matter.

FILE PHOTO: A sign of Larsen and Toubro (L&T) is placed on a road divider in Mumbai, India May 25, 2016. REUTERS/Shailesh Andrade/File Photo

L&T will buy out Mindtree's largest shareholder V.G. Siddhartha and companies which he founded, following which an open offer will be sent to the public shareholders of Mindtree, according to the report here published in the Indian newspaper on Monday.

Subroto Bagchi, who co-founded Mindtree in 1999, said on Twitter here that he has quit as the head of eastern Odisha state's Skill Development Authority to "save the company".

“I must 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,” Bagchi tweeted.

Ashok Soota, another co-founder of the Bengaluru-based tech company, said in an interview to CNBC-TV18 that L&T does seem poised to buy VG Siddhartha’s stake.

L&T is buying Siddhartha’s nearly 21 percent stake for over 30 billion rupees, at 981 rupees a share, which will make it Mindtree’s largest shareholder. Following this, L&T will trigger an open offer for another 26 percent from public shareholders, the report said.

Siddhartha, who is a promoter of Coffee Day Enterprises Ltd and Coffee Day Trading Ltd, holds a 3.33 percent stake in Mindtree as of December-end, BSE data showed. Coffee Day Enterprises and Coffee Day Trading carry a combined 17.08 percent stake in Mindtree.

Mindtree did not respond to a request for comment while L&T said it did not comment on market speculation.

($1 = 68.8450 Indian rupees)

Reporting By Arnab Paul in Bengaluru; Editing by Rashmi Aich and Muralikumar Anantharaman