What is Adani-NDTV Open Offer | News Bharat

Billionaire Gautam Adani eyes acquisition of news broadcaster New Delhi Television Ltd (NDTV) as a “liability” rather than a business opportunity, he said in an interview with the Financial Times on Friday.
The ports-to-energy conglomerate run by Adani, Asia’s richest man, unveiled plans in late August to acquire a majority stake in NDTV.
On August 23, Adani Group acquired a 29.18 percent stake in NDTV and said it will launch an open offer as required by market regulator Sebi to buy another 26 percent of the company. On November 22, Adani Group launched its open offer to acquire an additional 26 percent stake in NDTV. The offer will remain open until December 5, 2022.
An open offer is triggered if the acquirer owns more than 25 percent of the public shareholding in the company. The main objective is to provide an exit option to shareholders due to a change in control or a material acquisition of shares.
According to Sebi, an open offer is made by an acquiring company (in this case Adani) to the shareholders of the target company (NDTV), inviting them to sell their shares at a specified price. The purpose of the open offer is to provide an exit option to the company’s shareholders as there is a change in control or a material acquisition of shares.
Since Adani Group is already a major shareholder with 29.18 percent stake and is likely to restructure the company, it should make an open offer to buy another 26 percent stake so that minority shareholders who want to exit have option to do so. If the Adani Group manages to get the required 26 percent stake, it will become the largest shareholder in the company as its stake will reach 55.18 percent, allowing it to take management control of NDTV.
In August, Adani’s entities acquired Vishvapradhan Commercial Pvt Ltd (VCPL), which had lent over Rs 403 crore to the Prannoy Roy-led NDTV founders in 2009-10, in exchange for warrants allowing it to acquire a stake from 29.18 percent in NDTV.
Outlining its plan, Adani Group said the open offer would be at Rs 29 4 per NDTV share, while NDTV shares closed at Rs 386.8 per share on Friday. If fully absorbed, that would give it 55.18% of the popular news network.
There are four pricing metrics that Sebi has laid out for pricing an open offer – it should be the higher of (i) the 52-week volume-weighted average price per share; (ii) the highest price paid by the acquirer in the 26 weeks prior to the announcement, (iii) the volume-weighted average market price of the stock in the 60 days prior to the announcement, or (iv) the highest agreed upon purchase of shares agreement.
By Friday, 39.35 lakh shares of NDTV were already traded under the open offer, representing 6.1 percent of the company’s 6.44 crore shares.
NDTV’s third largest shareholder, apart from promoters Prannoy Roy and Radhika Roy (32.26%) and Adani Group (29.18%), is Mauritius-listed foreign portfolio investor (FPI) LTS Investment Fund Ltd with a 9.75% stake .
The takeover attempt raised concerns among journalists and politicians that the change of ownership could undermine NDTV’s editorial integrity.
Founded in 1988 and owned by husband-and-wife team Prannoy Roy and Radhika Roy, NDTV had earlier said the move from the Adani Group “was done without any involvement, discussion with or consent of the founders of NDTV”.
“The decision to acquire NDTV was taken in support of the Adani Group’s aim to create a reliable next generation media platform with an emphasis on digital and broadcast segments and that NDTV is the right broadcast and digital platform to achieve this vision,” Adani Enterprises had earlier said in a BSE filing.
“Independence means that if the government has done something wrong, you say it is wrong,” Adani told the FT in an interview. “But at the same time, you have to have courage when the government is doing the right thing every day. You should say that too.”
Adani added that it has invited NDTV’s founding owner Prannoy Roy to stay on as chairman when the acquisition closes.
With information from agencies

Source link