INSUBCONTINENT EXCLUSIVE:
The founders of Bengaluru-based IT services company Mindtree are looking to shore up their control of the company against a possibly hostile
private equity investors, family offices, institutional and HNI (high net worth individual) shareholders in the company to prop up a
The founders led by chairman Krishnakumar Natarajan have been holding meetings in Bengaluru and Mumbai to drum up support, they
CEO Rostow Ravanan, who is travelling overseas, is also actively engaged in these deliberations, the people said.
Discussions have taken
place with KKR and the family office of an Indian billionaire with interests in technology and consumer brands, said one of the
sources.
Investment banking sources add that KKR has already sounded out several financing banks about funding a possible purchase
But a deal without management rights and board representation will be difficult to sell.
Among the possible solutions being discussed is a
The founders are also believed to have met officials at Kotak Mahindra Bank
Kotak, KPMG and Mape are advisers in this transaction.
Natarajan and Sanjay Nayar, CEO of KKR in India, declined to comment
suitors fall through, said people with knowledge of the matter
out his 21% stake to a strategic buyer such as LTI or Baring Private Equity Asia, the latter being the controlling shareholder of another
mid-tier IT firm Hexaware.
Siddhartha is determined to sell his stake in the next 10 days and has sought binding offers from all suitors
this coming week, said people close to him
A passive investor, Siddhartha backed the founders led by Ashok Soota in 1999
Soota exited the company in 2011
Siddhartha has been looking to monetise his investments since last November to address his own liquidity issues
founding team to lead the company and has been among the most resistant to any deal, said the people cited above
The founders have been nudging Siddhartha to exit through the stock markets, which would be impractical for the seller
Publicly they have maintained that they are not looking to sell their stakes and intend to make the company stronger as they target to enter
the billion dollar revenue club in fiscal 2020.
PE investors are looking at affirmative shareholder rights and have told the founders that
discussions on condition of anonymity.
LTI too is not keen to be seen as a hostile corporate raider even though AM Naik, the non-executive
chairman of the company, and the one seen to be leading the negotiations with Siddhartha wants to play the role of an industry consolidator
Efforts are therefore on to garner wider support from other institutional shareholders of the company and pick up a bigger stake, thus
triggering an open offer for up to 26% of the company, in an effort to accumulate as close to 51% as possible
It could not be verified whether Mindtree founders had held discussions with LTI in the past few days.
The people cited above said another
3-4% stake may be available once Siddhartha exits, allowing a buyer to come close to the 26% threshold that will trigger an open
offer.
According to sources directly involved in the process, Naik had offered Rs 1,150-1,200 per share for the company as early as December
but wanted Siddhartha to win management support.
This, however, could not be independently verified
The share closed at Rs 909.45 on Thursday for a market value of Rs 14,934.45 crore
in digital competencies and portfolio alignment to growth areas will drive above-industry growth rates even as a potential increase in the
