Larsen & Toubro Ltd (L&T) has secured three seats on the board of Mindtree Ltd as the engineering giant presses ahead with the first hostile takeover in India’s IT services segment.
Mindtree said in a stock-exchange filing that its board has approved the appointment of three senior L&T executives as non-executive directors.
These include L&T chief executive and managing director SN Subrahmanyan, director and senior executive vice president of L&T's defence business Jayant Damodar Patil, and L&T chief financial officer R Shankar Raman.
Others joining the board include former chief legal officer of L&T, MR Prasanna, and former Indian ambassador to Japan, Deepa G Wadhwa. They have been named as independent directors.
The filing also stated that Mindtree co-founder Subroto Bagchi, who retires by rotation, has not offered himself for re-appointment.
At the end of March 2019, Mindtree had eight members on its board of which four were independent directors.
L&T is currently the largest stakeholder in Mindtree with around 30% stake and is aiming to increase its shareholding to more than 60% via an open offer that commenced on June 17.
L&T has offered to buy Mindtree shares at a price of Rs 980 apiece. Assuming full acceptance, it will spend as much as Rs 5,029 crore to buy the shares.
Days before the open offer began, the independent directors of the company had said that L&T’s offer was fair and reasonable.
The open offer was scheduled to start in the first half of May but was delayed as capital markets regulator SEBI had asked for a few clarifications from L&T.
On May 31, the Securities and Exchange Board of India approved the engineering major's open offer to buy Mindtree shares.
In April, L&T had completed the purchase of almost 20% stake in the Bengaluru-based IT services firm from its largest shareholder VG Siddhartha and two of his entities at Rs 980 apiece for more than Rs 3,200 crore.
The Mumbai-based company has also been steadily buying Mindtree shares from the open market; its total stake stood at 28.88% by the end of May.
L&T had announced in March its intention to buy a 31% stake in Mindtree through an open offer after buying out a few large shareholders. L&T had then said that it was looking to pick up another 15% from the open market as part of its plan is to hike its overall stake in the firm to 66%.
The deal is one of the most high-profile hostile takeover bids in Indian corporate history. Mindtree's founders, who own a little more than 13% stake in the firm, had opposed L&T's bid.
The Competition Commission of India had approved L&T's proposal to take over Mindtree in April.