InvestorQ : Can you tell me how Adani bought stake in NDTV when the promoters were not willing to sell the stake? Was it a stealthy acquisition?
NISHA Nayak made post

Can you tell me how Adani bought stake in NDTV when the promoters were not willing to sell the stake? Was it a stealthy acquisition?

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Priyanka N answered.
1 month ago
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I am not sure if you can call it stealthy because it is well known in the markets that the warrants had been issued by the holding company of NDTV to a company called Vishwa Pradhan Commercial Private Limited (VCPL), which had recently become a wholly owned subsidiary of AMG Media Networks Limited (AMNL), also called Adani Media group. Since VCPL held the warrants, Adani only exercised the warrants to enable the Adani group to buy 99.5% stake in the NDTV holding company, RRPR Holdings Private Ltd.

The promoters of NDTV, Radhika Roy and Prannoy Roy, hold 61.32% in NDTV. Out of this, while 32.14% in held by Radhika and Prannoy in their individual capacity, RRPR Holdings held 29.18%. This deal makes Adani Media group the direct owner of 29.18% stake in NDTV through this acquisition of the Holding company. Adani Media group is 100% owned by Adani Enterprises Ltd, which is a listed company. Now, as per the SEBI regulations, Adani Media Group will make an open offer for another 26% stake in the company.

The open offer price for the additional 26% stake has been fixed at Rs294 per share. However, that is a discount of nearly 20% to the current market price of NDTV. However, the stock price appreciation has happened largely in the last few days when the news of the Adani group acquisition was doing the rounds in the market. However, the company may be open to the idea of raising the open offer price. Once the offer is completed, Adani Media group gets full control of NDTV.

At least going by the stock price movement of NDTV in the last few days, it does not look like investors are going to have any problems with the acquisition. After standalone media groups have also struggled and will continue to struggle. The only way out is to get a bigger balance sheet as the other large media groups in India have already done. Prannoy may fulminate against the deal but he can hardly complain. The terms of the 2009 loan were very clear that the holder of the warrants had the right to convert it to stocks at any time.

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