After acquiring 29% stake, Adani group eyes additional 26% NDTV's share through open market

New Delhi: Adani group on Tuesday launched a hostile takeover bid of NDTV, with an open offer to acquire an additional 26 per cent or 1.67 crore equity shares for up to Rs 493 crore.

Three Adani group firms - Vishvapradhan Commercial Pvt Ltd (VCPL) along with AMG Media Networks and Adani Enterprises Ltd - have come out with a public announcement for the offer under the Sebi norms.

At a price of Rs 294 per share, the open offer will amount to Rs 492.81 crore.

"Assuming full acceptance of the Offer, the aggregate consideration payable to the public shareholders will be up to Rs 492.81 crore. The Offer Price is higher than the price determined in accordance with Regulation 8 (2) of the SEBI (SAST) Regulations," the public announcement said.

The offer price will be paid in cash by the acquirer, said the public announcement by JM Financial Ltd, which is managing the offer on behalf of the acquirers.

While citing the reason that triggered the open offer obligations, the announcement said pursuant to loan agreements dated July 21, 2009, and January 25, 2010, entered between the acquirer, RRPR Holding (a promoter company), Prannoy Roy and Radhika Roy, the acquirer at its discretion has the right to exercise warrants issued to it by the promoter company.

This will result in such a number of equity shares amounting to 99.99 per cent of the equity share capital of the promoter company RRPR Holding upon payment and in addition, also has the right to purchase from the Promoter Individuals shares held by the Promoter Individuals at the purchase option.

RRPR Holding Pvt Ltd (RRPR) is a promoter group company of NDTV with a 29.18 per cent stake in the broadcaster.

"Thus, the said transaction will result in a deemed direct acquisition (being an indirect acquisition meeting the thresholds specified in Regulation 5 (2) of the SEBI (SAST) Regulations) of voting rights in excess of 25 per cent of the Target Company (NDTV). Pursuant to the consummation of the Underlying Transaction and the Offer, the Acquirer shall acquire control over the Target Company," as per the announcement.

If the open offer is fully subscribed, Adani would own over a 55 per cent stake in NDTV, which owns three national news channels -- NDTV 24x7, NDTV India and NDTV Profit.

NDTV founder Prannoy Roy and Radhika Roy together hold 32.26 per cent shareholding in the company.

According to the announcement, the Adani group firm will not directly acquire any equity shares of NDTV "pursuant to the Underlying Transaction".

"However, pursuant to the Underlying Transaction, the Acquirer shall hold at least 99.5 per cent but up to 100 per cent of the paid-up share capital of the Promoter Company (RRPL Holding), which holds 18,813,928 equity shares in the Target Company constituting 29.18 per cent of the Voting Share Capital of the Target Company," it added.

NDTV's share price, which has risen more than 300 per cent so far this year, closed at Rs 366.20 apiece on BSE on Tuesday. The open offer price is 19.71 per cent lower than the closing price on Tuesday.