The proposal letter from L&T read as follows:
“What we are trying to do, is with, if I can use the word, ‘pyaar’ and we will continue to look at it as something we are doing from our ‘dil’.
Mindtree promoters kind of rebuffed them and said – Mind Your Own Tree
“If companies like you behave with extreme hostility to first generation entrepreneurs what message are you giving to all start-ups in the country”?
It is quite ironical that in 1987, Dubai-based Manu Chhabria had picked a 1% stake in L&T. In reaction, L&T Chairman N M Desai asked Dhirubhai Ambani to invest in the company’s shares as a white knight, resulting in RIL picking up a 12.4 % stake in L&T from the open market and later by 1989 increased his stake to 18.5%.
In November 2001, RIL abruptly sold their remaining 10.05% stake in L&T to Aditya Birla Group.
‘Apna maalik badal gaya hai’ (our owner has changed), Mohan Karnani, the then president of L&T cement business wriote to Mr A.M. Naik
This stake, after a protracted battle, was sold to L&T Employees Welfare Foundation. In return, L&T’s cement division was sold to the Birlas.
History is replete with example of hostile take-over bids, going either way.
1. Swaraj Paul’s failed bid for Escorts and DCM (1984)
2. ICI’s attempt to takeover Asian Paints (1997)
3. India Cements/ Raasi Cements (1998) and
4. The Dalmia group’s purchase of stake in GESCO’s real estate company (2000).
Unsurprisingly, the attempts failed for one reason or the other, except for India Cements’ successful acquisition of Raasi Cements.
We are here not commenting on the outcome of the current episode but rather on a larger issue of employee morale/motivation
For instance, in case of the MindTree L&T saga, one of the co-founders, Mr. Natarajan, asked
“Mindtree Minds (employees) have signed up for a mission, not just a salary. Take their mission away and they will go. What will you (L&T) be left with?”
It’s akin of how your wife will react post marriage, if she has been forced into the relationship against her wishes
The key issue here is that whether after the initial drama in the, is it “business as usual” for the employees or will they forever bear the grudge
It’s quite a task to overcome the challenges of acquiring and integrating an organization after a bitter proxy fight and hostile takeover. How does one defuse tension? How do you make the acquired entity’s people to commit to your company’s terms and conditions, values and mission?
What are you views?