Adani’s open offer for an additional stake in NDTV to begin on October 17 will not be a smooth affair
The Adani Group will begin its open offer for owning an additional 26 percent asset in the famous media firm New Delhi Television Ltd from October 17 to November 1. The decision has been revealed by JM Financial, the organization which is managing the offer. The decision has been mentioned in the draft letter of offer.
The open offer started with a bid of 1.67 crore INR equity shares which is recorded for Rs 294 per share and has been fixed. The amount will sum up to 492.81 crore INR if fully subscribed as revealed by the Gujarat-based conglomerate. Moreover, the DLOF has mentioned that the last date for SEBI observation is September 28, and the last date for the dispatch of the letters of offer to the public shareholders is October 10.
The Adani Group has opened up about its intention to acquire a majority stake in the News network through the accession of VCPL which holds 99.99 percent stakes in RRPR Holdings, a promoter entity of NDTV.
Previously, VCPL acquired a loan of 403.85 crore INR to RRPR holdings in 2009-2010. Against the loan issued by the VCPL, various convertible warrants were held, which included the 29.18 percent stake of NDTV Holdings. The loans issued by the VCPL allowed it the right to convert the warrants into a 99.99 percent stake if the loans were not repaid.
Adani Group first acquired VCPL from its new owner and then utilized the option to convert the unpaid debt into a 29.18 percent stake in NDTV. The step has initiated the open offer for an additional 26 percent stake in the company.
RRPR has said in the previous week that the transaction would require clarifications from the Income Tax Authorities as they were provisionally bound by the Income Tax Authorities in 2017 and even emphasized that the attachment would remain unchanged until the completion of reassessment proceedings.
Adani Group has expressed that the RRPR has issued the statements to delay the transactions and is seeking to justify its default in compliance with its obligation towards the allotment of equity shares to VCPL.
In the last two years, The Adani Group has made about 30 acquisitions summing up to about 20 billion USD. They were largely smooth affairs. The purchase of stakes has made Adani reach the Global rich list with Jeff Bezos and Elon Musk as his net worth started multiplying with the surge in the prices of his shares simultaneously.
Getting the hands-on NDTV stakes will not be a smooth affair for Adani: Here’s why?
In 2009, RRPR Holdings have issued a loan of 400 crore INR from VCPL, and in exchange, a convertible warrant was issued, which gave the latter a 99.99% stake in RRPR on conversion into shares. On August 23, Adani opened up that it has acquired VCPL and exercised the rights to own NDTV.
However, the decision has been resisted by NDTV stating that it was done without the company’s consent. The Company has revealed that the founders of the RRPR Company were prohibited from dealing in India’s securities market until November 2022 due to suspected insider trading. And this prevents the RRPR to convert the warrants it issued to VCPL.
Adani has refused to accept the statements made by NDTV stating that the SEBI regulations do not apply to the RRPR. However, the legitimacy of the statements is yet to be tested as both institutions have now sought clarifications from the regulator.
Adani’s open offer for an additional 26% stake in NDTV will tentatively start on October 17. However, the response will not be the same as anticipated as currently, the NDTV shares are trading at a 75 percent premium to the open offer price.
The takeover bid is not going to be easy as predicted by the legal. But, they believe that the Adani Group has already sought a plan to overcome the pushback from the NDTV founders.
