Larsen & Toubro (L&T) has been looking to acquire a majority stake in IT firm Mindtree, but has found itself running into hurdles with minority shareholders. The company currently has a holding of 28.9% in Mindtree via buyouts and insider trade deals, and has been looking to acquire over 66% in the company. The open offer that launches on June 17 and closes on the 28th, will enable L&T to potentially acquire 31% more in Mindtree, bringing their stake to just under 60%. 

L&T had launched its takeover bid by signing an agreement with Cafe Coffee Day chairman VG Siddhartha in March, and bought his 20.32% stake in Mindtree in a block deal at Rs 980 per share in April. L&T said at the time that Siddhartha had approached them with the buyout proposal. 

The conflict however, is ongoing. A handful of institutional investors of L&T, and Mindtree have reportedly written to SEBI to complain against investor Pulak Prasad, the founder of Nalanda Capital, for attempting to persuade other minority investors into rejecting L&T's offer to buy their shares. The report, first mentioned by ET, says that a letter sent to SEBI noted that Prasad is working with Mindtree promoters to dissuade institutional investors from selling to L&T. The argument Prasad is making is that L&T is not offering a fair price for Mindtree shares.

This could potentially be an illegal action, depending on how many stakeholders that Prasad is working with - by regulation, if at least 25% of stakeholders are trying to prevent a takeover bid, the only way such an effort can launch is if these investors have an alternate counter-offer for Mindtree at a higher price. 

However, can Mindtree put any significant brakes on the takeover? With the open offer approved for launch by SEBI, that looks unlikely. And the recent letter to SEBI can also put hostile investor actions under scrutiny, with significant risks for parties involved with resisting the bid.