L&T to buy stake in Mindtree: Employees say takeover will destroy company's 'unique culture'

Agencies New Delhi, Delhi, India Mar 19, 2019, 11.32 AM(IST)

File photo. Photograph:( Reuters )

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L&T is buying a 20.32 percent stake in the IT services company for about Rs 3,300 crore. Mindtree's promoters and employees are saying the organisation's 'unique culture' should be left that way. 

Mindtree Ltd's shares fell in early trade Tuesday after Larsen & Toubro Ltd (L&T) said it would buy a 20.32 percent stake in the IT services company for about Rs 3,300 crore. 

L&T will buy the stake from Indian coffee baron and Cafe Coffee Day owner VG Siddhartha, the construction company said late on Monday.

The Mumbai-based L&T also placed an order with its broker for an on-market purchase of up to 15 percent of Mindtree's shares at 980 rupees each. It is also looking to buy an additional 31 percent from Mindtree's public shareholders at the same price.

L&T stock was on Tuesday trading 1.2 percent lower in the Mumbai market that gained 0.2 percent.

Mindtree's promoters meanwhile released a statement saying L&T's "hostile takeover bid" was "a grave threat" to their "unique organisation". 

"The attempted hostile takeover bid of Mindtree by L&T is a grave threat to the unique organisation we have collectively built over 20 years," the statement read. 

The statement was issued collectively by Mindtree's Executive Chairman Krishnakumar Natarajan, co-founder Subroto Bagchi, Chief Executive Rostow Ravanan and Executive Vice-Chairman Parthasarathy NS.

"A hostile takeover by L&T, unprecedented in our industry, could undo all of the progress we've made and immensely set our organisation back," the statement said. 

"We believe that culture needs to be carefully created and nurtured over time, and can't be bought and sold like any asset," the statement added. 

Mindtree meanwhile added that it would continue to oppose the attempted takeover in the interest of its shareholders and employees.

Mindtrees's employees seem to feel the same way, saying the culture of their organisation is unique and that it should be left that way. 

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A number of them said on social media that Mindtree was like a "home" to them and a home is never for sale.