NDTV stock hits 5% upper circuit as Adani group’s AEL launches open offer to acquire 26% stake in the company

RRPR is a promoter group company of NDTV and holds 29.18 percent stake in NDTV. VCPL, along with AMNL & AEL (persons acting in concert), will launch an open offer to acquire up to 26 per cent stake in NDTV

Shares of New Delhi Television (NDTV) were locked at the 5 percent upper circuit, hitting a 14-year high at Rs 384.50 on the BSE on Wednesday as Gautam Adani’s group on Tuesday after market hours said it will buy a majority stake in the TV broadcasting & software production company.

Till 09:16 am; a combined 1.16 million equity shares had changed hands, and there were pending buy orders for 98,170 shares on the NSE and BSE.

The stock traded at its highest level since August 2008. In the past three months, the stock price of NDTV has zoomed nearly 140 percent, as compared to 8 percent rise in the S&P BSE Sensex. In one year, it soared 382 percent as against 6 percent gain in the benchmark index.

AMG Media Networks Limited (AMNL’s) wholly owned subsidiary Vishvapradhan Commercial Private Limited (VCPL) holds warrants of RRPR Holding Private Limited (RRPRH) entitling it to convert them into 99.99 percent stake in RRPR. VCPL has exercised warrants to acquire 99.5 percent stake in RRPR. Such acquisition will result in VCPL acquiring control of RRPR, Adani Enterprises (AEL) said in a press release.

AMNL, wholly-owned subsidiary of AEL, houses the media business of the Adani Group. The company was recently incorporated to set up a credible next generation media platform with emphasis on digital and broadcast segments, amongst others. VCPL, which was recently acquired by AMNL, is its wholly-owned subsidiary.

RRPR is a promoter group company of NDTV and holds 29.18 per cent stake in NDTV. VCPL, along with AMNL & AEL (persons acting in concert), will launch an open offer to acquire up to 26 per cent stake in NDTV, in compliance with the requirements of the SEBI’s (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the company said.

Meanwhile, NDTV in exchange filing said, without any discussion with the company or its founder-promoters, a notice has been served upon them by VCPL, stating that it (VCPL) has exercised its rights to acquire 99.50 per cent control of RRPRH, the promoter-owned Company that owns 29.18 per cent of NDTV.

The notice from VCPL is based on a loan agreement it entered with NDTV founders Radhika and Prannoy Roy in 2009-10. The notice states that VCPL has exercised its option to convert 1.99 million warrants into equity shares of RRPRH at Rs 10 per share, and that a total of Rs. 1.99 crore has been transferred to RRPRH, NDTV said.

The open offer for 26 per stake in NDTV, according to the document released to the stock exchanges on Tuesday evening, has been valued at Rs 493 crore. The open offer price has been pegged at Rs 294 per share, a discount of 19.7 percent to Tuesday’s closing price of Rs 366.2 apiece.

The existing promoter group (Roy family) of NDTV will have a residual stake of 32.3 percent. They have claimed Adani group firms had acquired the stake without consulting its promoters. Thus, there may be some legal repercussion ahead. The acquisition is in line with Adani group’s intent to foray into media and stake acquisition in Quint, recently, ICICI Securities said in a note.