One of the key co-founders of Mindtree, Ashok Soota who broke away from the company to set up his own in 2011, Happiest Minds, believes that the other promoters should have an alternate white knight to stall a takeover from L&T. Excerpts:

Did you at any point in time believe that Mindtree could face a hostile takeover?

Everybody knew this was going to happen. VG Siddhartha has been an angel investor for nine years and an investor for 20 years. So, sooner or later he had to exit. The founders have around 13 per cent stake. The founders have been making an effort to retain control and if I were in their place, I would do the same. But what has happened over the weekend is that the development seems to have picked pace.

You have said that you too would have tried to retain control of the company just as the others. But with 13 per cent, how long can the resistance last?

It is not resistance. Anybody who runs the company would want to continue because they have created an institution, provided careers for the founders as well as for the others. But the fact is that at the moment, there are not too many founders who are playing an active role. Because Subroto Bagchi is only a director on the board. There is KK (Krishnakumar Natarajan) and Rostow Ravanan and another one in the US. If all of them want to retain the reins of the company, they should move aggressively.

From what I gather, there must be a game plan. I should imagine share buyback is only a small part. There has to be an alternate funding plan...an alternate white knight. When Walden and I exited the company, and suppose we had sold it to potential suitors, they would have been in the same position as they are facing now. After 13 years, they are facing the same situation. I am sure they have planned some kind of a financial strategy.

Q: Why do you think L&T has zeroed in on Mindtree and not some other similar company?

Where will you get such an asset. Literally, there is no such asset with such values, quality of talent, of such good governance standards and such a solid one and with such a good customer base.

Are you happy with the kind of price L&T is offering to VG Siddhartha?

One of the big pluses for the shareholders is that if Mindtree does manage the pricing bit, they may actually end up jacking up the price.

They would slow down Naik (AM Naik, group executive chairman of L&T), but he is a very determined person and if he increases the bid price, then the shareholders are bound to gain.

For a long time, Mindtree has been talking about being a $1-billion company but that milestone is still far away…

See, firstly, I must tell you that I won’t hold it against them. When we made that statement and in fact, I was part of the company at that time, we said we don’t want to set a time frame but we will reach there. Then the market slowed down. But what is more important to note is that after the IPO in 2005, MindTree has given very good returns to its shareholders. Once an IPO happens, the responsibility shifts and that responsibility has been fairly discharged.

In case L&T does take over Mindtree, do you think the founders will have to quit?

See, Subroto (Bagchi) is not in the picture. KK does not have too many years to go. He is on an extended stay anyway. There is, of course,

Rostow Ravanan who is still young. If they want the transition to work, I think it will be L&T’s job to reach out and say that we have a place in the sun for you.

Related Topics