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We made an offer to Siddhartha at same price, but he chose L&T: Mindtree CEO

Varun Aggarwal Mumbai | Updated on March 27, 2019 Published on March 27, 2019

Mindtree CEO Rostow Ravanan

As Mindtree board shelves the share buyback plan , there are limited options available to Mindtree to remain independent and avoid a hostile takeover from L&T. In a conversation with BusinessLine, Mindtree CEO Rostow Ravanan said the company is evaluating multiple options. Excerpts:

Now that the board has shelved the buyback plan, what options are you left with?

There are many options that we are pursuing. You can understand that I can’t share that with anybody in the media at this stage. But, fundamentally, all with the objective saying what can we do to ensure that the culture and strategy of Mindtree do not get disturbed because it is that culture and strategy in combination have delivered superior results for all our stakeholders.

While you You had the option to buy out Siddhartha’s stake much before L&T did. Why didn’t you go ahead with it?

We put in a lot of effort into it; but for some reason the seller decided not to do this with us. We had made the offer at the same price or close to the same price but for some reason the seller was under some sort of pressure or some other considerations would have weighed in his mind. So, in spite of our efforts, he chose not to coordinate with us and chose to do this with L&T.

We had lined up multiple investors and different deals at different terms were put on the table, but for some reason none of those finally fructified and the seller finally did whatever he did with L&T.

L&T calls the deal a matter of ‘dil’ and ‘pyaar’ and refuses to acknowledge it a hostile takeover. What is your view on that?

From our point of view, if somebody did not want to be bought and just because you have ‘dil’ and ‘pyaar’ to try and buy somebody who did not want to be bought, it does not make sense for us. We are doing what we can to ensure that Mindtree continues on the trajectory we set for ourselves.

L&T management claims that Mindtree management approached them about six years ago for a possible investment. Why were you okay with their investment back then and not now?

It is completely false that Mindtree showed any interest or any one of us showed any interest at that stage. The deal did not make sense for us at that time and a deal does not make sense for us even now. It is not as though we went and approached them in the past or even now.

Would you be willing to engage with L&T in a dialogue?

We are disillusioned by some of the inaccuracies in the media reporting. Till the time something comes to us directly and officially, I am unable to make any comment. It is all theoretical because nothing has happened till today.

L&T CEO said he called KK and invited him for dinner for a discussion...

They have our email addresses and our phone numbers. If such an invite comes, we will evaluate it and do whatever is required at that stage. Nothing has come as of now.

What impact do you think this deal will have on your clients and employees?

The entire leadership team is focused on ensuring that Mindtree continues to deliver strong value for our shareholders, employees and customers. Managing Mindtree well is the number one job for all of us at Mindtree.

We are getting an enormous amount of support from all our clients and our people and many of our large shareholders, including our largest public market investor Nalanda Capital, which has never made any comment to media in the last 12 years, but has now come out openly and made cogent arguments as to why Mindtree’s current trajectory should not be disturbed.

Would you look at appointing an arbitrator to negotiate a price with L&T?

No such thing at the moment. No such plan to appoint an arbitrator because first of all there is no commercial dispute between the two of us that we need to arbitrate.

The kind of disruption the deal is creating, do you think it is impacting your business?

Not at the moment. But it’s something we are conscious of and watching from a day-to-day basis but at the moment there has been an outpouring of support from Mindtree minds all over the globe. Very strong support from many of our large clients and large investors. We are doing our best to ensure that business doesn’t get distracted. The only impact is that some of us are losing little bit of sleep trying to take care of business as well as this. But we are ensuring that business does not get impacted.

In case the deal goes through and Mindtree becomes a part of L&T, would you still continue to be a part of Mindtree management?

Absolutely no clue. We will cross the bridge when we come to it.

You’ve talked about false information being propagated in the media. Can you clarify what false information are you talking about?

There is no division of opinion among the leadership team or within the board, between the independent directors and the rest of the board because many of those are being actively propagated by media but they are completely untrue. The entire board, the entire leadership team is completely focused on making sure that the interests of Mindtree are protected.

A couple of days ago, a financial daily had an article on the front page saying the independent directors told Mindtree management to go negotiate a better price and don’t keep fighting. That’s completely false. Similarly, another report said that Siddhartha had brought many deals to us and we did not cooperate with him. That’s also false.

Published on March 27, 2019
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