Bengaluru/Mumbai: A day after conglomerate L&T mounted a Rs 10,733-crore hostile takeover bid on mid-tier IT services firm Mindtree, both the companies played on emotions and sentiments, making it literally a ‘mind’ play.
While Mindtree drew up a scenario of the start-up ecosystem coming under grave threat, Larsen & Toubro talked of pyar and dil (love and mind).
Predictably, the Mindtree management blasted Larsen & Toubro’s hostile move to garner 66 percent stake in the company, terming it as “value destructive.”
If L&T believes scale is critical for winning customers, it was thoroughly mistaken, cautioned the Bengaluru-based IT and digital services firm, which suddenly became the target of an unsolicited acquisition bid after coffee baron VG Siddhartha decided to sell his 20.3 per cent holding in the company on Monday.
Mindtree CEO Rostow Ravanan said, “Hostility is hostility. It’s a grave threat and value destructive to shareholders. We are a different organisation with a unique corporate culture.’’
Speaking at a media conference in Bengaluru, Krishnakumar Natarajan, Co-Founder and Executive Chairman, Mindtree, said, “The hostile takeover bid of L&T is a grave threat to the unique organisation we have collectively built over 20 years.”
Mindtree promoters asked why L&T could not build technology business on its own in scale and wondered what kind of a message is being sent to start-ups and credible entrepreneurs with a hostile takeover attempt.
Mindtree posed five questions to L&T, which already has two separate IT firms.
“You are a company with a turnover of Rs 1,20,000 crore, you are 18 times the size of Mindtree. Why can't you build a great technology business with your resources and capability without disseminating another organisation,’’ asked Natarajan.
L&T, on its part, said it would run Mindtree as an independent company, ruling out any plans to merge it with L&T’s infotech arm for the time being.
“We have not thought about integrating Mindtree with us (L&T Infotech). For the time being, it will be run as an independent entity,” L&T Managing Director and Chief Executive SN Subrahmanyan said at a press meet in Mumbai.
He said the move to acquire Mindtree should not be seen as hostile, assuring shareholders of both the firms that the approach should be understood with love and consideration.
“There are certain emotions and trepidation involved, but business is business. Emotions do play a part, but emotionalities have to be overcome as we go forward. What we are trying to do, is with, if I can use the word ‘pyaar’ , and we will continue to look at it as something we are doing from our ‘dil’. And we will continue to look at it with the same manner and purpose,” he said....