Larsen & Toubro is working out ways to avoid triggering the takeover code when its proposed employees' trust acquires Grasim's 15.74 per cent stake in the residual engineering company.

L&T is even contemplating buying less than 15 per cent from the Birlas to prevent tripping on the open offer tripwire under the Sebi takeover code.

The other possibility being explored was that of the financial institutions picking up a small part of the Birla holding, sources said.

The plan includes buying out the Birlas in L&T through two or more trusts or "unrelated bodies" to be floated under the company. However, the company is yet to work out how this can be done so as to avoid the Sebi definition of "entities working in concert."

Senior L&T officials said they would ensure that under no circumstance would the open offer norms be triggered. "The modalities are still being worked out. There is not much of a difference between the Birlas' stake in L&T and the 15 per cent threshold that triggers an open offer," L&T executives said.

The L&T employee trust will have to pay out around Rs 470 crore (Rs 4.7 billion) at the rate of Rs 120 per share for acquiring Birlas' 15.74 per cent holding in the residual company.

Icra, the credit rating agency appointed to advise the L&T board on the cement demerger issue, suggested a valuation of Rs 129 a share for the engineering business of L&T.