Home-grown IT services company Mindtree is the cynosure of all eyes after major shareholder VG Siddhartha sold 20 percent stake in the company to L&T, triggering a hostile takeover bid. Though engineering and construction major Larsen & Toubro has said it's not a corporate raider who's pushing a hostile takeover of the Bengaluru-based IT company, the deal has become a much muddled affair.
After gobbling up Siddhartha's 20 percent stake in Mindtree, L&T is going ahead with a plan under which it will acquire as much as 67 percent of the company. Though the Mindtree founders are pushed against the wall they haven't given up and are scheduled to meet on 26 March. The founders have vouched to protect the company from the 'corporate raider' by any means.
Amid all the chaos Mindtree founder and former CEO Subroto Bagchi dropped a bombshell on Friday saying all the founders were offered huge amount of money for stepping aside. "KK, Rostow, Partha and I were offered huge bags of money to give Mindtree away. We have respectfully said "no" to their overtures," Bagchi said, according to IANS.
"Our polite refusal has been interpreted as foolish idealism of a bunch of lower middle-class folks. That, we are," Bagchi added.
I cannot stay miles away, ensconced in another world to live the nightmare that the builders have arrived with the excavators, bulldozers, chainsaws, cranes and the impeccably drawn up blueprint to raze Mindtree
The Mindtree top brass, Bagchi, Krishnakumar Natarajan, Rostow Ravanan and Parthasarathy N.S. are digging in their heels and fight off the predator. The firm they founded in 1999 has gone on to employ nearly 20,000 people globally. It has offices in 17 countries and an annual revenue of $847 million.
Who are Mindtree founders?
Bagchi holds 3.1 percent stake in Mindtree while Krishnakumar Natarajan, who took over as the executive chairman of Mindtree from Bagchi in 2016, holds about 3.72 percent. Executive vice-chairman and chief operating officer Pathasarathy, holds 1.43 percent shares of Mindtree. Rostow Ravanan, who is not part of the original founding group, is the chief executive officer and managing director. He holds 0.71 percent stake in the company. Another founder, Ashok Soota, who initially served as the chairman of Mindtree, sold his 11 percent stake to Coffee mogul Siddhartha.
With Mindtree's future in the balance, Bagchi wrote a emotionally charged letter to the employees. Bagchi sought to shore up the morale of the employees. He was also explicit in his condemnation of the L&T move, saying the bigger corporate company should be focusing on building institutions rather than taking over another.
"Suddenly, Mindtree has become an "attractive asset" that they must have," Bagchi said. He also said he was resigning from his position with the Odisha government in order to focus on the problems at Mindtree. "I cannot stay miles away, ensconced in another world to live the nightmare that the builders have arrived with the excavators, bulldozers, chainsaws, cranes and the impeccably drawn up blueprint to raze Mindtree," he said.
"KK, Rostow, Partha and I will be the first line of defence on behalf of all Mindtree. I will be meeting each one of you at every Mindtree location in the coming days to answer any question you may have. Meanwhile, stay the course. Remember, you hold the Tree"," Bagchi said in the letter.
He also asked the employees to stay focused on their work, asking them to keep their "eyes on the screen, fingers on the keyboard and our customers on your mind". Mindtree founders are mulling various options to save the company from the takeover bid.
The long-simmering fear of the Mindtree founders finally came true on Monday when L&T bought a 20.4 percent stake in Mindtree from Cafe Coffee Day founder VG Siddhartha for about Rs 3,300 crore.