It’s a multi-stage bid. Pending regulatory approvals, $28 billion L&T wants to pick up 20 percent of its target through the top shareholder, an operator of a large coffee chain, at 980 rupees per share. It would then buy a further 15 percent through the open market. The conglomerate plans to eventually build up to 66 percent through an open offer, at a price to match its initial purchase.

The offer looks light, though. Although it values Mindtree at 21 times forward earnings, the same as market leader Tata Consultancy Services, the latter’s covetable digital revenue – generated from analytics and new technologies such as cloud computing – is lower. By contrast, that segment, expected to drive incremental IT spending, accounts for around half of the target’s business. The bid is also a mere 12 percent premium to the closing price on Dec. 5, before media reports that the top shareholder was looking to sell to KKR. And it is well below a 52-week high of 1,183 rupees per share in September.

In its current structure, moreover, the deal ignores synergies that could be gained by combining Mindtree with the suitor’s separately listed $4.1 billion unit L&T Infotech . There are fewer savings to be found in digital, which relies on innovation and speed, but they do exist in nooks that still require scale.

Plus, not all parents are equal. L&T Infotech has outperformed Mindtree by about 74 percentage points in shareholder returns since the former listed in July 2016. Larsen & Toubro, the would-be acquiring entity, has underperformed by 34 percentage points.

Mindtree’s holdout founders claim the support of their largest institutional shareholder, Nalanda Capital, giving them a total of about 25 percent. In a people business, a prolonged struggle could prove value destructive for both sides. A sweetened offer, and a clear future plan could help reprogram the deal.

Indian engineering-to-financial services conglomerate Larsen & Toubro said on March 18 that it would aim to acquire a stake of up to 66 percent in IT consulting and services company Mindtree, valuing it at 155 billion rupees, or $2.2 billion.

L&T announced it would first buy a 20.3 percent stake in the Indian company from an existing shareholder, plus another 15 percent of outstanding shares in the open market, followed by an open offer for a further 30.1 percent.

The price paid and offered for all tranches is at, or no more than, 980 rupees per share, a 12 percent premium to closing price on Dec. 5, before reports emerged of a potential stake sale by existing investors. Mindtree shares closed on March 25 at 940.75 rupees.

Mindtree says the deal will not create value for shareholders. The company’s founders, including Executive Chairman Krishnakumar Natarajan, own a combined 13.3 percent stake in the company.