A week after NDTV founders Prannoy Roy and Radhika announced that they are selling their most of stake in the media company to Adani Group, today Adani Enterprises Limited informed that it has completed the transaction. In a regulatory filing made with BSE and NSE on Friday, the Adani Group said it has acquired a 27.26 per cent equity stake in NDTV from Prannoy Roy and Radhika Roy, thereby becoming the majority owner of the media firm.
Adani Enterprises Limited said in the statement, “RRPR, an indirect subsidiary of Adani Enterprises and member of the promoter/promoter group of NDTV, has acquired 27.26% equity stake in NDTV from Mr Prannoy Roy and Mrs Radhika Roy (“Sellers”) by way of inter-se transfer under Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.
According to the filing made with the stock exchanges, RRPR will now hold a 56.45%equity stake in NDTV, as RRPR already held a 29.18 per cent equity stake in NDTV. The acquisition of shares from Roys was completed on 30 December.
The Adani Group also informed that Vishvapradhan Commercial Private Limited, an indirect subsidiary of the Adani group, holds an 8.27% per cent equity stake in NDTV. Therefore, Adani Group now owns 64.72% stake in New Delhi Television.
The statement by Adani Enterprises says that the company acquired the 27.26% stake from Roys at the price of ₹342.65 per share. This means that the company paid over ₹600 crore to Roys for the shares. According to the regulatory filing made by NDTV last week, Prannoy Roy transferred 86,65,209 equity shares and Radhika Roy transferred 89,12,467 shares to Adani group. This means both promoters transferred a total of 1,75,77,676 equity shares.
At the price of ₹342.65 per share, the total cost of 1,75,77,676 equity shares translates to ₹602,29,90,681. The price paid to Roys is almost same as the current market price of NDTV shares.
The Adani Group statement also mentioned that they paid cash to Prannoy Roy and Radhika Roy for the transaction.
It is interesting to note that the Adani Group paid a premium to Roys over the price paid in the open offer. The group paid ₹294 per share to acquire around 53.27 lakh shares of NDTV in the open offer, which means the promoters have been paid around 17% more. While laws say that the price paid in an open offer should be the same for all shareholders, this deal will be exempt from that rule. This is because, it was not an open offer but a transfer of shares from one owner to another owner, or an inter-se transaction. Because, the shares have been acquired by RRPR, which is an existing owner of NDTV. Moreover, the acquisition was announced after the open offer had ended.
The acquisition of NDTV by Adani Group began with the acquisition of Vishvapradhan Commercial Private Ltd (VCPL), a Reliance Group company, by AMG Media Networks, a wholly-owned subsidiary of Adani Enterprises Limited, in August this year. Vishvapradhan held warrants of RRPR, in exchange of interest-free loan, with the rights to convert them to 99.9% share in RRPR. RRPR was the holding company of Roys, through which they owned 29.18% in NDTV.
After acquiring Vishvapradhan, the Adani group executed the warrants acquiring RRPR, and became the 29.18% owner in NDTV. After that, the group made an open offer as per regulatory provisions, and Vishvapradhan Commercial Private Limited acquired an 8.27% stake through the open offer which was completed on 20 December.
On December 23, Prannoy Roy and Radhika Roy said in a statement saying that they are transferring most of their shares in NDTV to Adani Group, as the group has become the single-largest shareholder in NDTV after the open offer. Prannoy Roy and Radhika Roy have divested 13.44% and 13.82% of their shares respectively to the Adani Group, and have kept 2.5% shares each, remaining as minority shareholders.
The promoters had said that their discussions with Gautam Adani were constructive, and all the suggestions they made were accepted by him positively and with openness.
The Roys had said in their statement, “Mr. Adani has invested in a brand that is synonymous with Trust, Credibility, and Independence, and we are hopeful that he will preserve these values and expand upon them with all the responsibility required of a leader of an organization of this nature. We look forward to watching NDTV, and its entire extraordinary team, delivering the next phase of growth, one that India can be proud of.”
