What has happened?
- AMG Media Networks Limited, a subsidiary of the Adani group, will indirectly acquire a 29.18% stake in New Delhi Television Ltd (NDTV) and Launch an open offer for another 26% stake in the media house, the Adani Group said in a statement.
- An open offer is an offer made by the acquirer to the shareholders of the target company inviting them to tender their shares in the target company at a particular price.
- The primary purpose of an open offer is to provide an exit option to the shareholders of the target company on account of the change in control or substantial acquisition of shares, occurring in the target company.
What’s the offer?
- NDTV is a leading media house, which operates three national news channels – NDTV 24×7, NDTV India and NDTV Profit.
- It also has strong online presence and remains one of the most followed news handles on social media with more than 35 million followers across various platforms.
- The company recorded a revenue of ₹421 crore with an EBITDA of ₹123 crore and net profit of ₹85 crore in FY22.
- Adani entities made ₹493-crore open offer for 26% stake in NDTV at ₹294 per share.
- The media giant’s shares closed 5% higher today at ₹376.55 apiece.
- A public announcement has been made by JM Financial Ltd, which is managing the offer on behalf of the acquirers.
How Adani will indirectly acquire 29%?
- In a statement to NSE, Adani Enterprises said:
- “We hereby inform you that AMNL, a wholly owned subsidiary of the Company, has acquired 100% equity stake in VCPL,
- In accordance with the terms contemplated under the purchase agreement dated 23rd August, 2022.
- Adani said it bought Vishvapradhan Commercial Pvt Ltd (VCPL) for 14 billion rupees.
- AMNL’s wholly owned subsidiary VCPL holds warrants of RRPR Holding Private Limited (RRPR) entitling it to convert them into 99.99% stake in RRPR.
- VCPL has exercised warrants to acquire 5% stake in RRPR.
- Such acquisition will result in VCPL acquiring control of RRPR.
- RRPR is a promoter group company of NDTV and holds 29.18% stake in NDTV.
But NDTV promoters said different?
- In a statement to BSE Limited on August 22, NDTV clarified, stating “in the best interests of our shareholders – that we have clarified to the journalist in writing that this is a baseless rumour, and
- That Radhika and Prannoy Roy are not in discussions now, nor have been, with any entity for a change in ownership or a divestment of their stake in NDTV.
- They individually and through their company, RRPR Holding Private Limited, continue to hold 61.45% of the total paid-up share capital of NDTV.
- Gautam Adani competes with Mukesh Ambani, chairman of oil-to-telecom conglomerate Reliance Industries Ltd, that also has an interest in India’s vibrant media industry and owns Network18.
- Adani Group has seven publicly listed firms, which are in businesses such as operating airports and ports, power generation and transmission, coal and gas trading.
- Adani Enterprises Limited is the flagship company of Adani Group, one of India’s largest business organisations.
Q) An issue of shares that is not a public issue but offered to a selected group of persons is called?
- Public offer
- Private placement of shares
- Initial public offer
- None of the above