Bengaluru: Infrastructure major Larsen and Toubro on Tuesday moved in to allay concerns over its Rs 10,800-crore bid to take over IT services firm MindTree, whose management strongly objected to the proposal calling it "value destructive" and "grave threat" to the company's future. L&T, which has its own IT business, said it was not making any hostile takeover bid and that the deal was essentially triggered by the Mindtree's largest shareholder -- V G Siddhartha -- offering to sell his shares. This is seen as the first hostile takeover bid in the Indian IT industry.

Addressing a press conference in Mumbai, L&T Managing Director and CEO S N Subrahmanyan said Siddhartha would have anyways sold the stake and instead of it going to private equity players he wanted a corporate house to step in. "The senior management at Mindtree are good friends with us and are people of repute and we see a lot of positivity in going ahead with the deal. Mindtree will be run as an independent company, L&T will provide board oversight. We hope better sense and rationality will prevail," he said.

With "dil and pyaar" (heart and love), the company will be able to win over everybody, Subrahmanyan said, whereas Mindtree Executive Chairman Krishnakumar Natarajan told a news conference in Bengaluru, "This (bid) is a MeToo moment in corporate world". He was referring to 'MeToo movement', a series of complaints by victims of molestation.

Subrahmanyan made it clear that L&T, which is looking at the Mindtree deal as an investment to deploy its cash of over Rs 15,000 crore, will want at least 26 per cent stake in the target company. Mindtree management countered it with objections to the bid, calling it an "unprecedented" hostile takeover attempt which will damage value for shareholders of both the companies as customers and employees may leave the firm in case L&T acquires it.

"The attempted hostile takeover bid of Mindtree by Larsen & Toubro is a grave threat to the unique organization we have collectively built over 20 years," according to a statement from the executives, which include CEO Rostow Ravanan and Executive Chairman Krishnakumar Natarajan. "We don't see any strategic advantage in the transaction and strongly believe that the transaction will be value destructive for all shareholders."

The board of Mindtree will meet Wednesday to discuss share buy-back plan and way forward after L&T bid. "As far as buyback is concerned, the board will deliberate on the buyback or the open offer tomorrow within the framework of the laws. Obviously, there are laws - what the board can do and cannot do under the circumstances," the Mindtree CEO said.

Natarajan said L&T has decided to mount a first-ever hostile bid in the 50-year-old unblemished Indian IT industry. "If you (L&T) persist in whatever you are doing, you will be forever be remembered for this. Is this how you want to set an example?" he asked.

Asked about the options for the company to fend off L&T takeover, Natarajan said there are various options and the company remains 100 per cent committed to its long-term vision of building an independent company. Replying to a query, he said the independent directors will set up a committee and evaluate the open offer made by L&T.

"Nevertheless, what I would like to state is our 52-week high was Rs 1,183 and the deal was done at Rs 980. That only reflects the value of the transaction," he said. Mindtree management argued that the success of the company, which counts United Technologies Corp and Dutch phone company Royal KPN NV as its clients, depends on it being able to build long-term relationships with clients and partners, ties they argue would be jeopardized by the L&T's acquisition.

Natarajan said that the customers of Mindtree have selected it for its unique culture and warned that clients would "stall all future business and even take their business elsewhere" and demolish value for shareholders of both companies. Posing five questions to L&T, the promoters also wanted to know what would happen if Mindtree employees choose to leave after the takeover.

"You are a company with a turnover of Rs 1,20,000 crore, you are 18 times the size of Mindtree. Why can't you build a great technology business with your resources and capability without disseminating another organisation," Natarajan said. L&T had on Monday agreed to buy 20.3 per cent stake at Rs 980 per share in the IT firm for about Rs 2,370 crore from V G Siddhartha, the largest shareholder in Mindtree through Coffee Day Enterprises and affiliated entities.

At the same acquisition price per share, it placed orders with brokers to buy another 15 per cent of the market and announced an open offer for a further 31 per cent stake.