India’s first attempted hostile takeover in the technology sector is already proving to be a stormy one, with the Bangalore-based software services company Mindtree rejecting the bid put forth by engineering major Larsen & Toubro (L&T).

While L&T management  highlights the synergy of Mindtree with L&T’s IT portfolio companies, Mindtree promoters strike a more hostile note and vow to fight to the finish. Both Mindtree and L&T have gone all-out to convince shareholders of their respective stances.

Mindtree management maintains that the company has provided good returns to shareholders since going public in 2007 and is best placed to protect the interests of the stakeholders, including investors, employees, and clients.

L&T is adopting a multi-pronged strategy in its attempt to buy around 67% in the IT services firm for about 107.33 billion rupees (US$1.56 billion). It has entered into an agreement with Mindtree’s single-largest investor, V.G. Siddhartha, to purchase his entire 20.32% stake for 32.69 billion rupees ($473.42 million), it is also eyeing an additional 46% through market purchases and an open offer.

Though Mindtree has not revealed its next course of action, it is reportedly contemplating a counter offer with the backing of a friendly investor.

Mindtree had earlier made a buyback offer, but experts contend it will not be able to do so within the rules laid down by stock exchange watchdog Securities and Exchange Board of India.

The rules state that if an acquiring company announces an open offer, the target company shall not implement any buyback of shares or affect any other change to the capital structure unless the approval of shareholders by a special resolution by postal ballot is obtained.