All Things Newz

The bitter takeover battle between India’s Adani and news network NDTV

Article content

NEW DELHI — When India’s richest man Gautam Adani this week unveiled plans for his firm to control a majority stake in New Delhi Television (NDTV), it was the stealth approach in executing the transaction that drew most attention in the news industry.

But NDTV, one of nation’s most popular news networks, is seeking to block the takeover attempt by the billionaire tycoon’s group, saying regulatory restrictions prevent the bid from proceeding.

Article content

NDTV is regarded by some as one of the few independent voices in India’s rapidly polarizing media landscape, and the takeover attempt has triggered concerns among journalists and politicians that a change of ownership could undermine its editorial integrity.

Advertisement 2

Article content

This is how the firm controlled by the Adani family went about planning the takeover and how NDTV is trying to resist it.


Much of the spotlight on Adani’s two-stage takeover bid is on one, little-known Indian company: Vishvapradhan Commercial Private Limited (VCPL), founded in 2008.

More than a decade ago, NDTV founders Prannoy and Radhika Roy took 4 billion rupees ($50 million) in loans from VCPL, and in exchange issued warrants that allowed the company to acquire a 29.18% stake in the news group.

Those warrants were convertible at any time. Adani Group said on Aug. 23 it had acquired VCPL and exercised those rights, which should give it the stake in NDTV.

Adani Group’s takeover bid is without NDTV’s consent, the news organization said hours later. Internally, an NDTV memo referred to the move as “entirely unexpected.”

Advertisement 3

Article content


Adani Group’s indirect control of a stake above 25% means it must put forward an open offer to purchase at least 26% more from existing shareholders in NDTV to give them an opportunity to exit, according to Indian regulations.

That’s what Adani did. Laying out its plan, the Adani Group said the open offer will be at 294 rupees per NDTV share for a total consideration of up to $62 million.

If the two-stage plan works, Adani Group would get 55.18% of the popular news network.


Although NDTV has said Adani’s move was without its consent, four lawyers who spoke to Reuters said Adani Group was well within its legal rights in the deal process so far.

NDTV had said it was given two days to transfer the shares due to the Adani Group after it made the takeover bid.

Advertisement 4

Article content

But as that deadline neared, NDTV has threw a spanner in the works by disclosing on Aug. 25 that its founders were currently prohibited from dealing in India’s securities market.

That was due to a 2020 regulatory decision in a case of suspected insider trading of NDTV shares, the news network said, meaning it can’t tranfer shares Adani was trying to secure.

The regulatory restriction is in place until November this year, and a lawyer said NDTV’s effort at best can “stall or slow down the process” of Adani’s takeover.

Other lawyers have said NDTV should have foreseen the situation as its founders had issued warrants to VCPL years ago and there was always a possibility a company could execute them to acquire a stake.

One option would be for the NDTV founders to make their own open offer at a higher price to try to increase their stake and challenge Adani, said Shriram Subramanian, founder of proxy advisory firm InGovern. (Reporting by Munsif Vengattil in New Delhi, M. Sriram and Abhirup Roy in Mumbai and Nivedita Bhattacharjee in Bengaluru; Editing by Aditya Kalra, Jamie Freed and Kim Coghill)



Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Source link

Related posts

Prime Mining Announces Financial Results

Russian central bank slashes key rate to 8%, will study need for more cuts

Dubai Business Conditions Climb at Quickest Pace in Three Years