Gautam Adani is all set to take control of New Delhi Television (NDTV) as Radhika and Prannoy Roy have decided to sell the bulk of their stake in the news broadcast company after “constructive” discussions with the billionaire industrialist.
The Roys will transfer a combined 27.26 per cent stake, or 1.75 crore shares, in NDTV to RRPR Holding Pvt Ltd, which is now part of the Adani Group. The Roys will, however, retain a combined 5 per cent stake in NDTV after their stake sale.
In an exchange filing, NDTV said the acquisition price will not be set more than 25 per cent higher than the 60- day, volume-weighted average market price of Rs 368.43 per share. The transfer will take place within four days of this intimation — on or after December 30.
A 25 per cent mark-up over the 60-day average price works out to Rs 460.54 per share. If the deal is struck at this price, the Roys will get around Rs 809.52 crore for their stake.
On Friday, the NDTV stock closed at Rs 340.60 on the Bombay Stock Exchange. The 60- day average price of Rs 368.43 is about 8.2 per cent higher than the ruling price.
The 25 per cent mark-up price of Rs 460.54 amounts to a 35 per cent premium on the current market price.
“The AMG Media Network, after the recent open offer, is now the single-largest shareholder in NDTV. Consequently, with mutual agreement we have decided to divest most of our shares in NDTV to the AMG Media Network,” the Roys said in their statement.
“Since the open offer was launched, our discussions with Mr. Gautam Adani have been constructive; all the suggestions we made were accepted by him positively and with openness,” they added without divulging any details.
The Adani group had mounted a takeover of NDTV in August when AMG Media Networks Ltd (AMNL), a group company, acquired Vishvapradhan Commercial Private Limited (VCPL).
VCPL held convertible share warrants in RRPR Holding Private Ltd (RRPR), the promoter of NDTV, and held the rights to a 29.18 per cent indirect stake in the news channel.
Initially, the Roys had tried to resist the takeover but finally decided to throw in the towel.
The Adani group acquired another 8.27 per cent in NDTV – roughly 53.30 lakh shares -- through the open offer even though the price was at a discount to the market.
After the acquisition of the Roys’ stake, the Adani group’s holding will rise to 64.71 per cent.
As the controlling shareholder of NDTV, the Adani group has the right to nominate a chairman. The NDTV filing was silent on whether this would be done.
Currently, Prannoy Roy is the chairperson of NDTV while his wife Radhika Roy is an executive director.
Earlier, Gautam Adani had invited Prannoy Roy to stay on as chairman of NDTV. It was not clear whether Roy would accept the offer.
A cryptic line in the statement from the Roys seemed to indicate that they would prefer to stay on the sidelines. “We look forward to watching NDTV, and its entire extraordinary team, delivering the next phase of growth, one that India can be proud of.”
In a separate filing, NDTV said the board had decided to induct Sanjay Pugalia and Senthil Chengalvarayan of AMG Media as additional directors. Both have already joined the board RRPR Holdings.
“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 organisation of this nature,” the statement from the Roys said.
The acquisition of NDTV marks the Adani group’s second foray into the media segment. In May, it bought a 49 per cent stake in Raghav Bahl-led digital business news platform Quintillion Business Media in May.
