Shares of Larsen and Toubro (L&T) and IT company Mindtree Tuesday fell by 2 per cent after a hostile takeover bid by the former.
The stock of Mindtree declined 2.03 per cent to close at Rs 943 on the BSE. During the day, it dropped 2.44 per cent to Rs 939.
Shares of Larsen and Toubro went lower by 1.60 per cent to close at Rs 1,356.75 apiece. Intra-day, it slipped 2.24 per cent to Rs 1,347.95.
However, shares of L&T Infotech rose by 3.99 per cent to settle at Rs 1,636.05 per unit. During the day, it gained 6.21 per cent to Rs 1,671.10.
Under flak for mounting a Rs 10,733-crore hostile takeover bid on Mindtree, engineering major L&T Tuesday said the deal got triggered after largest shareholder VG Siddhartha approached them three months ago, and exuded confidence in winning over the unhappy promoters.
L&T had Monday night announced that it reached an agreement to acquire Siddhartha's 20.32 per cent stake at Rs 980 a share (valuing his stake in Mindtree at Rs 3,269 crore) and also announced its intention to raise the ownership to 67 per cent by buying an additional 31 per cent through an open offer (at the same price of Rs 980 a share which is 1.81 per cent premium over Monday closing price) and another 15 per cent off the market.
Together, the deal will cost the engineering major, which is sitting on a cash pile of Rs 15,000 crore, Rs 10,733 crore - of which Rs 3,269 crore will go to Siddhartha and related parties, and Rs 2,434 crore for the 15 per cent buyout from market and Rs 5,030 crore for open offer.
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The promoters of Mindtree led by Krishnakumar Natarajan, Subroto Bagchi, and Parthasarathy NS among others, responded calling the plan as a grave threat and a value-destructive.
"A hostile takeover by Larsen and Toubro, unprecedented in our industry, could undo all of the progress we've made and immensely set our organisation back," the promoters of Mindtree said in a statement on Tuesday.