Mindtree on Tuesday said that the board has decided not to proceed with buying back the company’s shares. Mindtree’s promoters who together own 13.32% in the Bengaluru-based IT-services firm were trying to counter infrastructure giant Larsen & Toubro’s (L&T) hostile takeover by buyback of shares through the open market.

Buyback allows a company to purchase its own shares in the open market to prevent other shareholders from taking a controlling stake.

“The board invited views from the company’s directors on the unsolicited offer made by L&T and after detailed deliberation and discussion, the board decided to immediately constitute the committee of independent directors (IDC) in the interest of all stakeholders to provide their reasoned recommendation in respect of the unsolicited offer by L&T for the consideration of the shareholders,” Mindtree said in a filing to the exchanges on Tuesday evening.

It added that all the independent directors will be members of the IDC, and the IDC has elected Apurva Purohit, lead independent director, as the chairperson of the IDC. “The IDC will consider and evaluate all aspects of the unsolicited offer, taking into account all relevant facts, circumstances, data related to the company and industry and the interests of all stakeholders involved. This committee will be supported by independent legal and financial advisors to help it with its deliberations,” Mindtree said.

On March 18, L&T announced that it entered into a definitive share purchase agreement with Café Coffee Day (CCD) founder V.G. Siddhartha and his related entities – Coffee Day Trading and Coffee Day Enterprises, to acquire a 20.32% stake in Mindtree, aggregating to about ₹3,269 crore. L&T also said that it would make an open offer to buy an additional 31% stake in Mindtree at a price of ₹980 per share in cash, besides another 15% stake in the IT firm separately through the open market route at a price not exceeding ₹ 980 per share. L&T had earlier said that it would acquire a total of 66.32% stake in Mindtree for about ₹ 10,700 crore.

Mumbai-based L&T and Mindtree on Tuesday announced that details of the open offer, which will be open for Mindtree shareholders from May 14 to May 27, 2019.

Shares of Mindtree closed at ₹950.55, up by 1.10% on Tuesday on the BSE, while shares of Larsen & Toubro were down by 0.37% at ₹1372.10. The sensitive index, Sensex, was up by 1.12%.

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