Adani Group to launch open offer for NDTV on October 17

The open offer for acquiring 1.67 crore equity shares, for which a price of ₹294 per share has been fixed, will tentatively close on November 1, said an advertisement by JM Financial, which is managing the offer.

If fully subscribed at a price of ₹294 per share, the open offer will amount to ₹492.81 crore,

On August 23, Adani group announced to acquire a 29.18 per cent stake in NDTV through the acquisition of VCPL, which holds a 99.99 per cent stake in RRPR Holding.

Following this Adani group firms – Vishvapradhan Commercial Private Limited (VCPL) along with AMG Media Networks and Adani Enterprises Ltd – have proposed to acquire an additional 26 per cent or 1.67 crore equity shares.

Days after this announcement, NDTV’s founder promoters asserted that the deal cannot go ahead without Sebi’s nod.

In an order passed on November 27, 2020, the Securities and Exchange Board of India (Sebi) restrained NDTV founders — Radhika Roy and Prannoy Roy — from the securities market for two years and that period ends on November 26.

As restrictions are still in force, hence a prior written approval from Sebi was required for Vishvapradhan Commercial Private Limited (VCPL) for the exercise of the conversion option on the warrants, NDTV founders had said.

RRPR Holding Ltd and Adani group have approached Sebi, seeking clarity on the applicability of the regulator’s earlier order regarding the conversion of warrants into shares, which has become a decisive factor in the hostile takeover battle for the media group.

Though Adani group has already rejected NDTV’s assertion saying that promoter entity RRPR Holding is not a part of the regulator’s order that restrained Prannoy and Radhika Roy from accessing the securities market.

Terming the contentions raised by RRPR Holdings as “baseless, legally untenable and devoid of merit”, VCPL had said the holding firm is “bound to immediately perform its obligation and allot the equity shares” as specified in the Warrant Exercise Notice.

VCPL had said RRPR is not a party to the Sebi Order dated November 27, 2020, and the restraints do not apply to it.

The Warrant Exercise Notice was issued by its subsidiary VCPL under a contract, which is binding on RRPR, it added.

On August 23, the Adani group announced to launch an open offer to buy an additional 26 per cent stake in the company, which operates three national news channels – English news channel NDTV 24×7, Hindi news channel NDTV India and business news channel NDTV Profit.

The key element behind the takeover bid is an unpaid loan that NDTV’s promoter entity RRPR Holding Pvt Ltd had availed from VCPL.

NDTV had taken a loan of ₹403.85 crore in 2009-10 and against this amount, warrants were issued by RRPR. With the warrants, VCPL had the right to convert them into a 99.9 per cent stake in RRPR in case the loan was not repaid.

Adani group first acquired VCPL from its new owner and exercised the option to convert unpaid debt into a 29.18 per cent stake in the news channel company.

The promoters of NDTV had claimed that they were completely unaware of the takeover until Tuesday and that it was done without their consent. 

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