Mindtree promoters, who hold around 13.3% stake in the global information technology (IT) consulting and services firm, have decided to unconditionally oppose what they call a hostile takeover bid by engineering and construction major Larsen and Toubro Ltd (L&T).

L&T on Monday entered into an agreement with Coffee Day Enterprises founder V.G. Siddhartha to buy his 20.3% shareholding in the mid-sized IT firm at ₹980 a share, aggregating to ₹3,269 crore.

The promoters, including Krishnakumar Natarajan (executive chairman), Subroto Bagchi (co-founder), Rostow Ravanan (CEO) and Parthasarathy N.S. (executive vice chairman and COO), said in a joint statement: “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. Since we started the company in 1999, we have built a rock-solid organization that outperforms its peers in IT services, differentiates and innovates through digital, and consistently delivers strong financial results and favorable returns to our shareholders. We’ve also carefully created a differentiated corporate culture made up of our amazing “Mindtree Minds,” which reached the 20,000 milestone this year."

L&T intended to purchase an additional stake of up to 15% from the open market, at up to ₹980 a share, the statement said. That could cost it up to ₹2,434 crore.

“A hostile takeover by Larsen & Toubro, unprecedented in our industry, could undo all of the progress we’ve made and immensely set our organization back. We don’t see any strategic advantage in the transaction and strongly believe that the transaction will be value destructive for all shareholders. Our collective success depends on building and nurturing relationships with our clients and partners. This unexplainable transaction will bring disruption to those relationships and impair Mindtree’s ability to differentiate itself in the market and continue to deliver client value and great shareholder return. We believe that culture needs to be carefully created and nurtured over time, and can’t be bought and sold like any asset,” said the statement.

L&T has also announced an open offer to shareholders of Mindtree to acquire another 31% at ₹980 a share, amounting to ₹5,027 crore depending on the response to the offer.

“We remain 100% committed to our long-term vision of building an independent company. We believe it’s in the best interests of our shareholders, Mindtree Minds, and our organization overall to continue opposing this takeover attempt. In addition, there has been a large outpouring of sentiment from Mindtree Minds online at #MindtreeMatters expressing their strong desire to retain our culture and our independence. In the meantime, while this situation unfolds, Mindtree will continue to be laser focused on continuing the stellar work for our clients and delivering great value to them,” the statement said.

Anil Singhvi, Chairman ICAN Investments Advisors, told The Hindu, “I think every shareholder has a right to find the best price for its investment for entry and exit, I am surprised that the Board of Mindtree chose to meet to decide for buyback now when faced with this kind of situation. Now, it’s to be seen how the board decides to thwart the takeover bid of L&T. It’s not hostile as the largest shareholder has decided to sell its stake to them.”

The Mindtree board is scheduled to meet on Wednesday to consider a buyback offer.