Mindtree founders hope to stall takeover

New Delhi, Jan 29: Mindtree founders continue their search for a white knight even as they oppose the largest shareholder and Coffee Day founder V G Siddhartha’s impending sale of his 21% stake to L&T. The infra giant is expected to trigger a hostile takeover if it strikes a share purchase deal with Siddhartha, unseating the founders of the Bengaluruheadquartered, mid-tier IT services company. The four Mindtree founders — Krishnakumar Natarajan, N S Parthasarathy, Subroto Bagchi and Rostow Ravanan — together own over 13%.
It was on Monday reported that L&T has taken an enabling resolution to reach a deal with Siddhartha. L&T is awaiting completion of legal formalities, including an income tax reprieve after the department issued prohibitory orders on transferring 4.2% of Siddhartha’s holding in Mindtree. The founders are continuing with their sentimental lobbying, hoping to stall a hostile takeover at the last mile.
An email sent to Natarajan on their strategic recourse remained unanswered till the time of going to print. The founders believe that the 19-year-old Mindtree still has a long runway and they are capable of steering it towards new milestones — the $1-billion revenue target being the closest. At an industry level, Hexaware founder Atul Nishar said the Indian IT industry hasn’t seen a hostile takeover yet. “Some of the mid-sized IT firms are run by credible management teams, raising the bar on compliance. Any attempt of hostile takeover appears like a punishment for honesty. The software industry runs on relationships between management teams and clients, and if the management changes abruptly, it’s not good for business or shareholders,” Nishar, who sold his company to Baring Asia, said.