Adani makes hostile bid to take control of NDTV

Asia’s richest man, Gautam Adani, has launched a hostile takeover of the country’s popular NDTV television network in a deal that has sparked concerns about the future of one of the media outlets prepared to criticise Narendra Modi’s government.

In a stunning coup that blindsided the network’s high-profile founders, a unit of Adani’s sprawling conglomerate said on Tuesday that it will be acquiring a 29.18 percent stake in NDTV in a complex deal involving one of the network’s investors.

Under Indian takeover regulations, the move triggers an open offer for a stake of another 26 percent. If that is successful, Adani would be left with a controlling stake of 55 percent.

The purchase put an end to months of rumors about a potential acquisition, which caused the price of NDTV shares to increase fivefold in 9 months (from $75.55 on December 1 to $376.55 on Tuesday on BSE).

By purchasing Vishvapradhan Commercial Pvt Ltd (VCPL), which held convertible debentures in RRPR Holding Pvt Ltd, which in turn held 29.18 percent of NDTV Ltd, Adani Group companies indirectly acquired the holding in NDTV.

In exchange for a loan it provided to the promoter holding firm in the sum of Rs 404 crore, Vishvapradhan purchased the debentures in 2009–2010.

An organisation that purchases over 25 percent of the equity in a publicly listed firm is required by Indian securities law to make an open offer to public shareholders to purchase the remaining 26 percent.

According to Sebi’s takeover procedures, Adani Group with Vishvapradhan declared an open offer on Tuesday for Rs 294 per share, or 28 percent less than NDTV’s closing price of Rs 376 on the same day.

NDTV, which claimed that Adani group entities had purchased the shareholding without contacting its promoters in a disclosure to the exchanges on August 23 evening, immediately objected to the acquisition.

The NDTV founders and the firm would like to clarify that this operation of rights by VCPL was carried out without the input, discussion, or approval of the NDTV founders, who, like NDTV, were only made aware of this exercise of rights today.

Despite being the subject of market conjecture even before the Adani company formally declared its entrance into media in March of this year, Adani’s acquisition of a stake in the well-known broadcaster was suddenly revealed in exchange documents released in rapid succession on Tuesday evening.

In response to a media inquiry, NDTV stated in exchanges on Monday that its promoters were not involved in any discussions regarding the sale of a stake.

NDTV – which was founded in 1988 by journalists Prannoy Roy and his wife, Radhika Roy – operates national channels in English and Hindi, along with a business channel and online news websites.

One of India’s most popular news organisations, NDTV is regarded as one of the few media groups that takes a critical view of Modi’s BJP-led government policies. Guatam Adani is a strong ally of Modi, who has been known to fly on Adani corporate jets.