NDTV, one of India’s oldest private media companies, is set to switch ownership on Tuesday with the Adani Group launching a hostile takeover bid. If it is successful, Adani will have around 55 per cent stake in NDTV.
Initially, Adani will acquire 29.18 per cent stake in NDTV through a company called Vishwapradhan Commercial Pvt. Ltd (VCPL), which has lent ₹403 crore to NDTV’s founder-promoters, Prannoy Roy and Radhika Roy. VCPL, a subsidiary of Adani-owned AMG Media Network Ltd (AMNL), had offered Royce a 10-year interest-free loan in 2009. Though the loan is yet to be repaid, VCPL has exercised a warrant to acquire RRPR Holding Pvt Ltd, Royce’s holding company, through which it holds 29.18 per cent stake in NDTV.
As per the terms of the agreement, Royce had to return the loan amount to VCPL in 2019, the failure of which has now given full control of RRPR and consequently the company’s stake in NDTV has been passed on to VCPL. To recover its loan, VCPL has now sold the collateral it held to Adani.
Open offer at ₹294 per share
Following this transaction, VCPL, AMG Media Networks (the media arm of the Adani Group) and Adani Enterprises will spend Rs 492.81 crore to acquire an additional 26 per cent stake through an open offer from public shareholders of NDTV. In an announcement by VCPL to the stock exchanges, it has been said that it, along with two Adani companies, will offer to acquire shares of NDTV at Rs 294 per piece. NDTV shares closed at Rs 366.20 on BSE.
This will be the second major investment by the Adani Group in the media sector. Adani recently bought 49 per cent stake in Quintillion Business Media Ltd.
Sanjay Puglia, CEO, AMG Media Networks Ltd. said, “This acquisition is a significant milestone in AMNL’s journey towards paving the way for new age media across all platforms.” “AMNL seeks to empower Indian citizens, consumers and those interested in India with information and knowledge. With its leadership position in news and its strong and diverse reach across genres and geographies, NDTV is the best-suited broadcast and digital platform to fulfill our vision. We look forward to reinforcing NDTV’s leadership in news distribution.”
TheRoy’s, on their part, are saying that this would be a hostile takeover of NDTV by the Adani Group as they were not aware of the deal between the Adani Group and VCPL. Royce will continue to hold around 32 per cent stake in NDTV. Prannoy Roy holds 15.94 per cent, while his wife Radhika holds a 29.18 per cent stake in VCPL besides 16.32 per cent stake in the news channel.
“Without any discussion with NDTV or its founder-promoters, a notice has been served to them stating that it (VCPL) has exercised its right to acquire 99.50 per cent control of RRPR Holding Pvt Ltd, which is the promoter Ltd., which owns 29.18 per cent of NDTV,” Roy said in a disclosure made to the stock exchanges.
“The Founders and Company of NDTV would like to clarify that this exercise of authority by VCPL was performed without any input, negotiation or consent from the Founders of NDTV, who have been made aware of this exercise like NDTV. Rights only today. As recently as yesterday, NDTV had informed the stock exchanges that there is no change in the shareholding of its founders.
RRPRH, which holds 29.18 per cent stake in NDTV, has been asked to transfer all its equity shares to VCPL within two days. VCPL’s notice is based on the loan agreement entered into with NDTV founders Radhika and Prannoy Roy in 2009-10. The announcement on behalf of Royce said.
A source close to Roy Camp said they are in the process of evaluating next steps, many of which involve regulatory and legal processes.
23 August 2022