Adani to acquire 29.18% in NDTV; makes Rs 493-cr open offer for another 26%

This came as AMNL's wholly-owned subsidiary VCPL had warrants of RRPR Holding Pvt Ltd, the holding company of NDTV

The media arm of the Adani group on Tuesday said it had exercised rights to acquire an indirect stake of 29.18 per cent in New Delhi Television (NDTV) through the conversion of loans into an equity stake in the promoter group company of NDTV.

The move has also triggered an open offer for acquiring a 26 per cent stake in NDTV from its shareholders, even as the broadcaster said its founder-promoters had not consented to the exercise of rights, nor was any conversation or input given on the matter. The promoter entity RRPR Holding, at the centre of the acquisition, has been asked to transfer its shares to the acquirer Vishvapradhan Comm­ercial (VCPL) in two days, NDTV said.

“The NDTV founders and the company would like to make it clear that this exercise of rights by VCPL was executed without any input from, conversation with, or consent of the NDTV founders, who, like NDTV, have been made aware of this exercise of rights only today. As recently as yesterday, NDTV had info­rmed the exchanges that there was no change in the shareholding of its founders,” NDTV said. 

A mail sent to Suparna Singh, group president of NDTV, as well as a text message sent to Prannoy Roy on the company’s next course of action elicited no response till the time of going to press.

The open offer for 26 per stake in NDTV, according to the document released to the stock exchanges on Tuesday evening, has been valued at Rs 493 crore. The open offer price has been pegged at Rs 294 per share, a discount of 19.7 per cent to Tuesday’s closing price of Rs 366.2 apiece.

As on June 30, NDTV’s Prannoy Roy and Radhika Roy directly held 15.94 per cent and 16.32 per cent, respectively, in the company. RRPR Holding owned 29.18 per cent.

AMG Media Networks Limited’s wholly owned subsidiary VCPL holds warrants of RRPR Holding, entitling it to convert them into 99.99 per cent stake in the firm. “VCPL has exercised warrants to acquire 99.5 per cent stake in RRPR. Such acquisition will result in VCPL acquiring control of RRPR,” the Adani group said in a statement. AMG Media Networks is owned by Adani Enterprises.

NDTV said VCPL had served a notice on the broadcaster based on a loan agreement it entered with its founders in 2009-10. “The notice states that VCPL exercised its option to convert 1,990,000 warrants into equity shares of RRPRH at Rs 10 per share and that a total of Rs 1.99 crore has been transferred to RRPRH,” NDTV said.

“This acquisition is a significant milestone in the journey of AMNL’s goal to pave the path of new-age media across platforms,” Sanjay Pugalia, CEO, AMG Media Networks, said.

However, Sriram Subramanian, founder and managing director, InGovern Research, a proxy advisory firm, sees this as a hostile takeover bid. “To me, this is a clear case of a hostile takeover, where the promoters have not been taken on board. Within 24 hours of the promoters of NDTV issuing a clarification with regard to their shareholding, comes the announcement by Adani,” he said.

Experts said the company might issue a public notice asking shareholders not to participate in the open offer.

“Prannoy and Radhika Roy may not tender their shares in the open offer since there was no consent or conversation with them on the matter,” Subramanian said.  

Foreign portfolio investors and corporate bodies held 14.7 per cent and 9.61 per cent in NDTV, according to its shareholding pattern as on June 30.

NDTV closed the fiscal ended March 31, 2022 (FY22) with net sales of Rs 396.4 crore and a net profit of Rs 79.8 crore. This was higher than the Rs 357.6 crore in net sales and Rs 70.9 crore in net profit reported in FY21. Its total debt reduced to Rs 21.8 crore in FY22 from Rs 74.5 crore in FY21.