L&T Infotech likely to finalise Mindtree stake acquisition this week from Cafe Coffee Day founder

L&T Infotech is likely to finalise acquiring Cafe Coffee Day founder VG Siddhartha’s 20.41% stake in Mindtree as early as this week for a price close to `975/ share, which is higher than the price offered by KKR at about `925/share, a source aware of the matter told FE. Mindtree’s shares closed Tuesday’s session 1.59% down at `916.50 on the BSE.

Siddhartha and entities controlled by him hold about 20.41% stake in Mindtree. He is believed to be actively looking to sell his stake and has been in talks with several strategic and private equity players. Other players that are in talks for the stake buy include Baring Private Equity Asia and ChrysCapital.

According to the source, ChrysCapital is believed to have shown interest in acquiring only 10% of Siddhartha’s stake in Mindtree while Baring Private Equity Asia is still in the talks.

FE had reported last week that L&T Infotech was believed to have offered a price close to `975/share to purchase Siddhartha’s stake.

It may acquire additional shares from the open market so that finally through an open offer it can acquire controlling stakes in the company.

Following this, L&T Infotech may eventually consider a merger between Mindtree, L&T Technology Services and itself, a source had told FE.

If L&T Infotech decides to merge itself with Mindtree and L&T Technology Services, there would be considerable synergies between the three firms, an investment banker had indicated.

L&T Technology Services, part of the L&T Group, is a listed entity and has expertise in engineering design, product development, smart manufacturing, and digitalisation. It has a market capitalisation of Rs15,943.16 crore, according to the Bombay Stock Exchange (BSE) as on Tuesday.

L&T Infotech is a technology consulting and digital solutions company that claims to have operations in 30 countries, according to its website. It was founded in 1997 as a subsidiary of Larsen & Toubro. The company has a market capitalisation of Rs29,122.17 crore, according to the BSE on Tuesday.

Mindtree is a technology consulting and services company that began in 1999. Currently, it has a market capitalisation of Rs15,050.22 crore.

In an email response, KKR said it will not comment on the story. An email query sent on Tuesday evening to ChrysCapital remained unanswered till the time of going to the press. Siddhartha could not be contacted individually for his response.

In the Q3FY19 earnings call, Rostow Ravanan, chief executive officer at Mindtree had stated that the management team at MindTree is completely committed, passionate and completely enjoying what they are doing, when asked to comment on media reports pertaining to the stake sale.

“So at this point of time, there is no interest for the MindTree management team to change any of our plans. I think we are totally, totally focused on making MindTree even stronger, making MindTree a memorable company. As far as the plans of shareholders go, we are not privy to it. It is their priority and their prerogative as to make their own financial decisions. So we are not tracking, not following up, etc, with any of our shareholders. So no comments on our shareholders’ plans, but emphatically want to reiterate that there is no change in the approach by the management team at MindTree,” Ravanan said in the earnings call according to a transcript on Bloomberg.