L&T set to acquire Mindtree for ₹16,250 crore.

 Engineering to construction conglomerate Larsen and Toubro Ltd. (L&T) is set to takeover Bengaluru-based IT services firm Mindtree Ltd. by buying the 20.4% stake held by Café Coffee Day (CCD) founder V G Siddhartha along with his two Café Coffee Day affiliate firms in Mindtree.

L&T will pay Rs. 981 per share to buy the entire stake held by Siddhartha and two of his CCD firms, said a person directly aware of the development .

“L&T will buy the 20.4% stake and will announce an open offer to buy up to 51% in Mindtree on Monday evening," said this person.

Typically, an entity is required to make an open offer to gain control of a listed form only after acquiring 25% in the latter. But, in this case, L&T is set to use a section of the takeover code stipulated by Sebi that is rarely used to takeover a listed firm.

“Using section 3, clause 1 of the takeover code, along with section 4 of the code, L&T is entitled to announce an open offer to acquire control of Mindtree," said the person.

According to Sebi’s takeover rules, an acquirer can launch an open offer to gain control of a listed firm only it makes a public announcement to acquire more than 25% stake and voting rights in the listed firm eventually.

This section of the takeover law is rarely used. Typically, an acquirer first buys 25% in the listed firm to trigger a mandatory open offer to take control of a listed firm.

KPMG’s corporate finance team is handling the mandate for the entire deal, said the person cited above.

LIVEMINT