NDTV Challenges Adani Control Over Media Group

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What has happened?

NDTV (New Delhi Television Ltd) on Thursday said that the Adani group needs prior approval from India’s capital markets regulator SEBI,
To acquire 99.5% control of RRPR Holding, the promoter-owned company that owns 29.18% of the news network.
RRPR Holding is owned by NDTV founder Prannoy Roy and Radhika Roy.

More than a decade ago, NDTV founders Radhika and Prannoy Roy took a 4 billion Indian rupees ($50 million) loan 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 Tuesday it had acquired VCPL and exercised those rights, which should give it the 29.18% stake.
NDTV said it has been given two days to transfer all the shares to the now Adani Group-owned VCPL.
Adani Group’s takeover bid is without NDTV’s consent, the news organisation said in a statement hours after the announcement.

Adani Group’s indirect control over a stake above 25% means it must put forward an open offer to purchase at least 26% more from existing shareholders to give them an opportunity to exit, according to Indian regulations.
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.
At the full take-up, this would give it 55.18% of the popular news network.

The Securities and Exchange Board of India has barred NDTV promoters, Prannoy Roy and Radhika Roy, from the securities market for two years.
The market regulator has also directed them to disgorge illegal gains of more than Rs 16.97 crore for indulging in insider trading over 12 years ago.

One option would be for the owners to make their own open offer at a higher price to try to increase their stake.
But, LTS Investment Fund which owns 9.75% in NDTV, also owns 1.69 per cent in Adani Enterprises and also in other group companies including Adani Power 1.09%, Adani Transmission 1.63% and Adani Total Gas (1.27%).
Also, NDTV founders could try to stall Adani Group’s bid by alleging breach of contract and approach an Indian court for relief

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